SECTION 1031 EXCHANGES EXPLAINED Kevin Fitzgerald, U.S. Advisors

Introduction The former chief executive officer of U.S. Advisors, Kevin

Fitzgerald currently serves as CEO of Global Capital Advisors LLC in San Francisco. As the organizational leader of U.S. Advisors, Kevin Fitzgerald sponsored real estate transactions involving Section 1031 exchanges.

According to the tax code set forth by the Internal Revenue Service, individuals must pay taxes on any financial gain derived from the sale of business or investment properties. If the seller reinvests the proceeds from a sale in a similar property, he or she can defer paying taxes under the provisions of Internal Revenue Code Section 1031.

Section 1031 Exchanges To qualify for tax deferral under Section

1031, an individual must reinvest funds in a like-kind replacement property. The definition of “like-kind” properties is considerably broad, allowing sellers to exchange agricultural land for a commercial development or even swapping one business for another. Sellers must designate a new property within 45 days of selling the old property and close on it within 180 days.