( The following is an excerpt from our Business Asset Exchange Advisor newsletter located here )
Does this sound too good to be true? Many of your competitors, rental companies, dealers, contractors are already using 1031 Exchanges to sell business assets and defer the payment of taxes on the gain provided they use the proceeds to acquire additional business assets.
What does 1031 Exchange mean? 1031 Exchange transactions have been permitted under federal tax law since 1921. [Section] 1031 refers to the particular section in federal tax law. Exchange means any purchase, sale or trade of business assets within 180 days handled by a “Qualified Intermediary.” A Qualified Intermediary (QI) is an individual or entity (1) that is not related to or associated with the Taxpayer; and (2) who is responsible for documenting the transaction under federal tax law.
