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Internal Revenue Code Section 1031 can be a powerful mechanism for deferring capital gains tax on certain types of investment transactions. This section allows a taxpayer to exchange real or personal property for new "like-kind" property, while deferring any realization of capital gains for up to 180 days. During the deferral period, the proceeds of the sale are placed with a Qualified Intermediary. To quality for deferral, strict adherence to the provision is necessary. Therefore, it is critical to select a Qualified Intermediary that has a thorough understanding of all the details of the regulations and specializes in this type of transaction.
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