Q: I have a residence that I have been renting and I want to sell it, delay payment of the capital gain tax, and then purchase an office building. Can I use a 1031 tax deferred exchange to delay payment of the tax I would otherwise have to pay?
A: Subject to the extensive tax code and rules and regulations of the IRS, the use of an exchange of property under section 1031 of the tax code should be considered as a method of delaying payment of the capital gains tax owed on the proceeds of the sale of relinquished property. However, it is a relatively complex transfer of real property that has significant tax issues, and the advice of a qualified and trustworthy accommodator should be sought before making a decision about using a 1031 tax deferred exchange. Read more A 1031 Tax Deferred Exchange Can Delay Payment of the Taxes Owed On the Sale and Subsequent Purchase of Business and Investment Property