Why should I consider a 1031 exchange?

Are many oil & gas properties exchangeable assets?

Yes, and each divestiture needs to be examined to determine if it is a good candidate for 1031 tax treatment. In this economic climate, it is clear that mineral interests are changing hands at a very feverish pace. What is somewhat less clear is that these need not be taxable transactions. In fact, both the sellers and the buyer benefit when capital gains taxes do not have to be subtracted from the sales price. By taking advantage of the 1031 exchange tool, sellers get to keep more wealth, and buyers can consummate more deals more quickly if they are knowledgeable about Section 1031 of the Internal Revenue Code. Section 1031 states that no gain or loss shall be recognized (or taxed) if property held for productive use in a trade or business or held for investment is exchanged solely for property of a like-kind to be held for investments, or for productive use in trade or business.

What properties qualify for a 1031 exchange?

What does not work for 1031 exchanges in oil & gas?

How long do I have to own my property before I can exchange it?

Can I purchase my replacement property first?

Do I have to re-invest all of my cash?

How long do I have to complete my exchange?

Why choose Petroleum Strategies for your 1031 exchange?


Petroleum Strategies, Inc. does not give tax or legal advice. The information contained herein should not be relied upon as a substitute for tax or legal advice obtained from a competent tax and/or legal advisor.