1033 Exchange 2019-01-17 08:00:00

1033 Exchange

A method of deferring capital gains taxes on property that is lost involuntary to condemnation, theft, or casualty, and a gain is realized from the insurance or condemnation proceeds. Although similar in scope to a 1031 exchange, the steps to transacting a 1033 exchange vary significantly. See Disasters and 1031 Exchanges (Part 2) for a list of these differences.

For example, say John owns property on the east coast. After a hurricane enters the enter, John’s property is completely destroyed, leaving him subject to $200,000 in insurance proceeds. If this money leads to a gain on John’s next tax return, he may be subject to taxes if he does not execute a 1033 exchange within the next four years (See IRC Section 1033(h)).


Download our guide to real estate investing

Another Way To Own Investment Properties

Learn new ways to use real estate to pursue your wealth goals.

By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. To manage receiving emails from Realized visit the Manage Preferences link in any email received.