Tax-Deferred Exchange

Carryover Basis
The carryover basis concept is pivotal in a tax-deferred exchange, wherein the adjusted tax basis of the property surrendered is used to determine the tax basis of the property acquired.
Tax-Deferred
An investment option where accumulated earnings are not taxed until the investor takes possession of the assets.
Tax-Deferred Exchange
A tax-deferred exchange, commonly known as a 1031 exchange, allows for the deferral of capital gains taxes on an exchange of like-kind properties.

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