What is an IRS 1031 Tax-Free Exchange?
An IRS 1031 Tax-Free Exchange is tax law that allows you to postpone the payment of capital gains taxes. By exchanging your capital asset into a like-kind investment, you postpone payment of capital gains tax. Capital gains tax typically is paid on the gain in value of a capital item at its sale. Currently, the federal capital gain tax rate is 20% of the total net gain in capital value.
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