Finance
What is a '1031 exchange' and how can Illinois real estate investors use it?
AAn exchange between two Illinois property owners where no money changes hands
BA tax-deferred exchange under IRS Code Section 1031 allowing investors to defer capital gains taxes by reinvesting proceeds from one investment property into another like-kind property✓ Correct
CAn exchange of a residential property for a commercial property; requires IDFPR approval
DA tax credit program for Illinois property owners who upgrade energy efficiency
Explanation
A 1031 (like-kind) exchange allows Illinois real estate investors to sell investment property and defer capital gains taxes by reinvesting the proceeds into another investment property within specific timeframes: 45 days to identify the replacement property and 180 days to close. The properties must be like-kind (any real property held for investment/business), and a qualified intermediary must handle the exchange funds.
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