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Video: What are Valid Selling Expenses in a 1031 Exchange?
In a 1031 Exchange, if certain expenses associated with the selling or purchasing of property are paid with the exchange funds it will create a taxable event, however some selling expense can be paid without creating a tax liability.
In a Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange , if certain expenses associated with the selling or purchasing of property are paid with the exchange funds it will create a taxable event. However, there are certain selling expenses that can be paid with exchange funds without creating a tax liability, learn what those specific expenses are within this video.
