The 1031 Exchange Blog

Fracking and 1031 Exchange

Posted by Andy Gustafson on Tue, Feb 25, 2014

Mineral interests such as oil and gas are eligible for a 1031 exchange deferring federal and state capital gain taxes given the transactions satisfy the Internal Revenue Code Section 1031 requirements. Smart owners selling fracking mineral interests of natural gas deposits should consider whether a 1031 exchange makes sense. The tax that would otherwise be paid is deferrable into any type of real property, including investment and commercial properties. The 1031 exchange represents an indefinite interest free loan or additional working capital for use towards acquiring replacement property.

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Tags: mineral interests, oil and gas royalties

1031 Exchange and Minerals

Posted by Andy Gustafson on Thu, Dec 05, 2013

Capital gains taxes are imposed on the gain realized from the sale of real property in the United States. A taxpayer who wishes to avoid the payment of capital gains tax may enter into a Section 1031 Exchange instead of a conventional sale if all the exchange requirements are met. A transaction that qualifies for an exchange allows the taxpayer to defer to capital gains tax that would otherwise be due as a result of a sale. For a transaction to potentially be eligible for Section 1031 treatment the property involved must be held for productive use in a trade or business, or for investment. In addition, the property relinquished must be exchanged for “like-kind” property.

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Tags: mineral interests

1031 Exchange and Mineral Interests

Posted by Andy Gustafson on Tue, Nov 26, 2013

When a taxpayer enters into a traditional sale of real property the taxpayer may incur capital gains taxes as a result of any gain realized from the sale. Because realized gains have historically been taxed at a high rate taxpayers often look for legal strategies that reduce or eliminate capital gains taxes. One option is to enter into a Section 1031 Exchange instead of a conventional sale. If a transaction qualifies for Section 1031 treatment, capital gains taxes that would ordinarily be levied on the gain realized from the sale are deferred. There are, of course, a number of requirements that must be met for a transaction to qualify for 1031 Exchange treatment, including:

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Tags: mineral interests

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