1031 exchange

I have heard that you can exchange into an annuity but have not been able to
locate any literature. Any ideas?

 

For an exchange to be "like kind", the replacement property MUST be of (you
guessed it) like-kind. So you can not exchange land for an annuity, or a
car for an annuity, or a tractor for an annuity.


--
Paul A. Thomas, CPA
Athens, Georgia

WARNING: This post may contain violent
punctuation, explicit grammatical errors,
and a shocking ending with a preposition.

 

1035 Exchange

You are probably referring to Section 1035 fo the Internal Revenue Code that allows you to exchange out of one annuity and into another annuity. You are not permitted to exchange from real estate into an annuity.

There is a relatively new strategy out there referred to as the Structured Sale, which involves an annuity. This strategy is not an exchange. It actually triggers your gain, but you defer it over a period of time using an annuity. There is no IRS guidance on this structure, so be careful.