Understanding Real Estate

Tax-Deferred Exchanges

In this area confusion often sets in. Put very simply, any type of real estate used for business, trade or investment purposes will qualify. Examples are: apartments, office buildings, multiplexes, single family or condo rentals, raw land, farms, ranches, commercial, and industrial. All of these will qualify! A lot adjoining a primary residence can also qualify if it is considered investment property.
MIX & MATCH: You are not limited to exchanging for property similar or exactly like your present property. The law and the IRS allows you to trade raw land for an apartment building or a commercial mall, or a condo rental as long as you structure it as an exchange. As long as you are selling (wanting to exchange) real property used for business, trade or investment purposes; you can buy (exchange it for) any other type of business, trade or investment properties. For example, you can sell your self-operated gas station (trade property) and buy an apartment building (business property) and pay no taxes!