Daily Section 1031 Brief

Stepped-up basis is what turns "tax-deferred" into "tax-free" — and when you combine it with Section 121 and Section 1031, you have a lifetime investing strategy that shelters gains on a primary residence, defers gains on every investment property you ever sell, and...

Renting a property for three years before moving in costs you more than twice the taxes of the reverse approach — on the same sale price, the same property, the same five-year window. The order in which you occupy a home isn't a technicality; it's the lever that...

When a shareholder in a C corporation dies, the deferred gain locked inside the corporation's real estate does not die with them — it survives, untouched, because corporate property receives no stepped-up basis at a shareholder's death. Partnerships and LLCs face no...

Selling a furnished rental splits into two transactions the moment you close — one for the real estate, which your 1031 exchange can shelter, and one for the furniture, fixtures, and equipment, which it cannot. That second transaction triggers depreciation recapture,...

The name on the deed to your Replacement Property must be identical to the name on the deed to the Relinquished Property you sold. Get that wrong at closing and you risk losing the exchange entirely. Why the Title Match Is Non-Negotiable When you sell your...

When you receive real estate as a gift, you inherit the donor's tax problem along with the deed. IRC Section 1015 locks your basis to whatever basis the donor held — no reset, no step-up, no relief from years of accumulated depreciation. What Basis Means Before We Go...

Your basis in a rental property is not fixed at the moment you close — it moves, and after five years of claiming depreciation, it moves in exactly the wrong direction for your tax bill. How Basis Is Built on Day One IRC Section 1012 sets the rule plainly: the basis...

Where you hold title — and where you live — determines whether one spouse's death wipes out a lifetime of deferred tax liability or merely reduces it by half. What Stepped-Up Basis Actually Does IRC Section 1014 resets the basis of inherited property to its fair...

Not all deferred gain is taxed the same way, and the difference between the two rates can be significant. The type of property that generated the depreciation determines the rate — and a Section 1031 Exchange defers both kinds in their entirety. Two Types of Property,...

Buy a home, live in it for two years, rent it out for three — and when you sell just before the five-year window closes, Section 121 shields every dollar of capital gains, including the appreciation that built up while tenants were paying your mortgage. The only tax...