{"id":37913,"date":"2020-05-19T14:01:05","date_gmt":"2020-05-19T11:01:05","guid":{"rendered":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/?p=37913"},"modified":"2025-05-22T13:09:35","modified_gmt":"2025-05-22T10:09:35","slug":"1031-exchanges-under-covid-19","status":"publish","type":"post","link":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2020\/05\/19\/1031-exchanges-under-covid-19\/","title":{"rendered":"1031 Exchanges Under COVID-19"},"content":{"rendered":"\n

NYC-based\u00a0boutique law firm\u00a0Pardalis & Nohavicka<\/a>\u00a0brings the latest legal updates from the world of real estate to PropertyShark.\u00a0Pardalis & Nohavicka\u00a0handles an eclectic array of matters, representing individuals and business owners in civil litigation, criminal cases and business transactions,\u00a0currently litigating and representing clients throughout the United States and around the world.<\/em><\/strong><\/p>\n\n\n\n

COVID-19 continues to upend professional and personal lives, and the real estate industry has received one of the harshest economic hits. As a result, industry professionals have had to make adjustments in order to complete complex processes like 1031 exchanges.<\/p>\n\n\n\n

<\/span>What Is a 1031 Exchange?<\/strong><\/span><\/h3>\n\n\n\n

In short, a 1031 exchange \u2014 also known as a like-kind exchange \u2014 is a process that allows a seller to defer paying capital gains tax on a sale. The seller does this by investing the entire sale amount into the purchase of another property. Basically, it\u2019s when one property is swapped for another of like-kind. 1031 exchanges can also involve co-ops<\/a>.<\/p>\n\n\n\n

<\/span>Why Choose a 1031 Exchange?<\/strong><\/span><\/h3>\n\n\n\n

The main benefit of a 1031 exchange, as opposed to simply selling one property and buying another, is the tax\u200b deferral\u200b<\/strong>. Essentially, the money that would have otherwise been put toward taxes can now be reinvested into the new replacement property.<\/p>\n\n\n\n

Additionally, the 1031 exchange also allows real estate investors to more freely shift the focus of their investments and projects \u2014 while avoiding the need to pay a significant amount in taxes.<\/p>\n\n\n\n

Simply put, it encourages sellers to buy again and keep buying \u2014 and that keeps the market moving for everyone. In this way, investors can diversify their portfolios with a different type of property or properties, or choose an investment property that\u2019s easier to manage.<\/p>\n\n\n\n

<\/span>1031 Exchanges Under COVID-19<\/span><\/h3>\n\n\n\n

Like the real estate industry as a whole, 1031 exchanges have also been affected during the pandemic. For instance, under typical conditions there are two deadlines to keep in mind during the 1031 exchange:<\/p>\n\n\n\n