The Possibilities for a 1031 Tax Exchange for Real Estate

If you’re looking to sell property in Chester County, one thing you might want to look into is a 1031 tax exchange for a property. Known as a powerful wealth-bringing tool available to sellers, the 1031 exchange allows taxpayers to sell investments, income or business property, and replaced it with a like-kind property. Within a specific time frame, you can sell one qualified property and proceed with an acquisition for another.

What makes a 1031 tax exchange unique is that it is really treated as a literal real estate exchange rather than a standard sale. This method may be right for you, but be sure to know all of the ins and outs of the process before jumping in. That’s where a licensed real estate professional comes in.

If you’re looking for a replacement “like-kind” property to your existing one, you should consider the possibilities of a 1031 tax exchange to sell your PA property. Any other action would require the payment of a capital gains tax, which will likely continue to rise as the years go on. 


The basis of the appeal of the 1031 is that the IRS depreciates real estate investments at a three percent yearly rate until it is completely depreciated. In short, it would be possible for an investor to defer capital gains for his or her entire life. Real estate property used for investment and business qualifies for a 1031 exchange, but personal residences do not.

These days, to qualify for a 1031 exchange, the transaction must really be an “exchange.” This means that you cannot just sell one property in Chester County and then buy another as one normally would. The property being sold and the property being exchanged for it must both be used for business or investment purposes, and they must be like-kind properties.

Whether you want to sell PA property by exchanging a lot of land for an apartment building or a shopping center for an office building, the 1031 tax exchange for Chester County real estate is an exciting option that should certainly be considered when looking to sell a property.

While the benefits of the exchange are great, it should certainly be noted that the rules and regulations are meticulous and time constraints are strict. Special care and planning must be taken into consideration if you are planning on taking part in this exchange.

To learn more the possibilities of a 1031 tax exchange when selling property in Chester County, PA, contact realtor Liz Saunders at 1-888-914-4833 or send her an email.