First a definition and some background 1031 Like-Kind Exchanges - Real Estate Tax Tips

Generally, if you exchange business or investment property solely for business or investment property of a like-kind, no gain or loss is recognized under Internal Revenue Code Section 1031. If, as part of the exchange, you also receive other (not like-kind) property or money, gain is recognized to the extent of the other property and money received, but a loss is not recognized. Like-Kind Property Properties are of like-kind, if they are of the same nature or character, even if they differ in grade or quality. Personal properties of a like class are like-kind properties. However, livestock of different sexes are not like-kind properties. Also, personal property used predominantly in the United States and personal property used predominantly outside the United States are not like-kind properties. Real properties generally are of like-kind, regardless of whether the properties are improved or unimproved. However, real property in the United States and real property outside the United States are not like-kind properties. Additional Resources Publication 544, Sales and Other Dispositions of Assets Form 8824, Like-Kind Exchanges (PDF) Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance page. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court.

1031 IRS code allows you to exchange foreign property for foreign property.

So if you have foreign investment property for sale and wish to buy an investment property in Mexico than you can defer any capital gains you have made on the property you sell. If you are selling U.S. property you CAN NOT exchange that for Mexico property. The 1031 IRS code does not allow that type of exchange.

Director of Exchange Operations

MEGA1031 Exchange

Toll Free 866.881.1031

Local 303.780.7840

Fax 303.292.4353

Laura@MEGA1031.com