Many investors want to be able to take advantage of the Internal Revenue Code 1031 but they think it is only available to those investors with multi-million dollar properties; however, that is not the case. If an investor would like to sell their property and perhaps get out of any type of further real estate management, then one of the most powerful tools they have at their disposal is an IRS 1031 exchange.

The 1031 real estate exchange is so powerful because is available to all investors, regardless of the size of their holdings, as long as the property has been used for investment or business purposes. No matter whether you are interested in selling undeveloped land, a multi-family dwelling, a strip mall or hotel property, the 1031 is a great tool to use for deferring non-recaptured depreciation and capital gains.

Often times an investor will chase market appreciation, yet they need to realize that any investment only makes sense if it can produce enough of a cash flow. In order to give yourself the ability to redirect investments without incurring capital gains taxes, you need to take advantage of the Internal Revenue Code 1031. You will be doing yourself a big favor, especially in a tenuous market.

One of the biggest developments in the section 1031 exchange is the variety of replacement property choices that now exist. Originally, investors were limited to locating new property that would carry pretty much the same headaches as their old property; however, IRS procedure 2002-22 codified TIC exchange (tenant-in-common) and this was basically the birth of a new real estate industry.

Investors can become angry and fed up with hands-on management, and the many capital improvements and increasing operating expenses. The Internal Revenue Code 1031 can be the solution to a perfect real estate exit strategy. And, as the population matures, the older investors are seeking income streams without the hassle of hands-on management. Now they can sell their property using a section 1031 exchange and acquire TIC interest, which hands over the management and profit and loss statement to a team of experts, yet they still receive a steady income. Another powerful aspect of the section 1031 is that eventually investors can exchange that property into their primary residence, thus avoiding capital gains altogether.