Question

Can anyone explain to me what is a non-taxable exchange, what makes the exchange not taxable and provide me with some examples?

Answer 1

A non taxable exchange is called 1031 exchange or like kind exchange, here the capital gain arising from the sale of an asset which is similar or like kind in nature, the tax is exempted,

this tax free benefit is given because the people will reinvest in the similar line of asset than paying tax, this will make a grow in individuals better to thier assets

The like kind property means the asset having similar nature, for example the living space is transferred for office space , a rental space is transferred for business space, a agricultural property transferred to acquire another agricultural property , there is a situation in which is taxable, when this agriculture property transferred to acquire a commercial building office then it is not tax free

The transfer should be happen within the parameters of usa.