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What is Boot? & How to Avoid It

what is 1031 exchange boot

What Is 1031 Exchange Boot?

We assume if you’re completing a 1031 exchange, you’re not interested in paying capital gains taxes with your next tax return. For a 1031 exchange to be entirely tax-free, you must not receive boot from the exchange. Unfortunately, any received boot is taxable, so if your goal is to avoid paying capital gains tax on the exchange, you may want to avoid boot.

Types of Real Estate 1031 Exchanges

Section 1031 of the Internal Revenue Code underlines the rules of exchanging property held for investment or productive use. If you meet the requirements, you can acquire real estate through a like-kind exchange or 1031 exchange.

Tips for selecting 1031 Investment Properties

People who are looking to sell their investment property at a significant profit are soon faced with the question of “How do I replace that income with a better asset?”

How Do I Break Even?

At 1031 Crowdfunding we are always seeking to answer some of the questions we get asked most frequently. Whether you are looking to begin investing in real estate or you are an experienced real estate investor looking for an alternative investment vehicle, you may be curious about the potential of Delaware Statutory Trusts (DSTs).

Choosing an Identification Strategy for 1031 Exchanges

There are very specific requirements for identifying and acquiring potential like-kind replacement properties in your 1031 exchange transaction. Section 1031 of the Internal Revenue Code (“IRC”) specifies that investors must identify candidate replacement properties within a 45-day period to defer capital gains taxes through a 1031 exchange.