Here is Your 1031 Exchange Alternative that Defers Capital Gains Tax and Delivers Cash at Closing.
A Tax-Deferred Installment Sale is a way of structuring the deferral of Capital Gains Tax of a highly appreciated agricultural asset, such as a farm, farmland, vineyard, grazing land, etc. that can be a lower-risk alternative to a 1031 exchange because it does not involve IRS deadlines for replacement property.
Advantages of a Tax Deferred Installment Sale Compared to a 1031 Exchange.
- No exchange deadlines — you can take your time finding replacement property if that is your objective. This means you won’t be “boxed in” as deadlines approach, and you will not be tempted to overpay for replacement property, or settle for a sub-standard property, just to preserve your 1031 exchange tax deferral.
- No “like kind property requirements.” You can use the proceeds from a tax-deferred cash out to invest in other real estate OR any other type of asset.
- No “boot” issues.