Hart's Real Estate Tax Tips

Welcome to the Hart Realty & Property Management, LLC Tax Tips section of our website. Although we are not CPA's and you should always seek the advice of a trusted CPA prior to investing in real estate, we do have some tax tips which you may find useful as you invest in real estate.

One of the biggest tax breaks the government gives home owners and real estate investors is called a 1031 Exchange. Generally, if you exchange business or investment property solely for business or investment property of a like-kind, no gain or loss is recognized under Internal Revenue Code Section 1031. If, as part of the exchange, you also receive other (not like-kind) property or money, gain is recognized to the extent of the other property and money received, but a loss is not recognized.

Section 1031 does not apply to exchanges of inventory, stocks, bonds, notes, other securities or evidence of indebtedness, or certain other assets. This is why real estate investing can be a tax advantage in addition to a profit center.

Like-Kind Property Information

Properties are of like-kind if they are of the same nature or character, even if they differ in grade or quality. Personal properties of a like class are like-kind properties. However, did you know that livestock of different sexes are not like-kind properties? Or, did you know that personal property used predominantly in the United States and personal property used predominantly outside the United States are not like-kind properties?

Although there are some very specific like-kind property regulations in existence, real properties generally are of like-kind, regardless of whether the properties are improved or unimproved. However, real property in the United States and real property outside the United States are not like-kind properties.

Hart Realty & Property Management, LLC offers 1031 Exchange services to homeowners, investors & others interested in getting into real estate investing. Although we specialize in offering 1031 Exchange services to those currently living in, looking to invest in or relocate to the greater Myrtle Beach, Carolina Forest & Conway, SC areas - we will happily consult outside of the state of South Carolina on a general basis as best we can. Some 1031 Exchange regulations are the same across the United States, while others vary by state. As always, please contact us at: (843) 903-HART or fill out the contact us form if we can be of further assistance to you in your real estate investing endeavors.

Additional Resources on 1031 Like-Kind Exchanges

• Publication 544, Sales and Other Dispositions of Assets
• Form 8824, Like-Kind Exchanges (PDF)

Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance page. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court.