WHEN TO CONSIDER A TAX DEFERRED EXCHANGE
When an investor owns property held for investment or for use in a trade or business and one or more of the following events presents themselves, a tax deferred exchange is a viable option.
- A business needs to increase size, change location or upgrade their property.
- When an investment real estate or certain personal property has maximized the depreciation allowable.
- When sufficient equity has been accumulated to allow leveraging into a larger investment with greater return.
- When an investor of qualifying property wishes to change the nature of character of the investment.
There are of course many other times and conditions when a 1031 exchange is appropriate. The above-mentioned are what frequently triggers this action.