Defer capital gains taxes by taking advantage of the 1031 Exchange Program.
If you’re preparing to sell an investment or business property, Ledyard Bank can help you make the most of that moment. Through our trusted 1031 Exchange services, you may be able to defer capital gains taxes—allowing you to preserve more of your wealth, strengthen your cash flow, and strategically expand or consolidate your portfolio.
When selling property, it’s possible to defer capital gains taxes by taking advantage of the 1031 Exchange Program.
Real estate investors can defer the payment of capital gains taxes and depreciation recapture by purchasing a “like kind” property within 180 days of sale. Thanks to our longstanding relationship with JTC Americas, a Qualified Intermediary that specializes in 1031, we can help you take advantage of this great program.
With our commercial exchange services, we guide you through every stage of the process—helping you structure the exchange thoughtfully and offering expert insight into partnership divisions and other complex ownership arrangements.
For residential rental property held for investment purposes, we support clients by providing education and coordination throughout the exchange process. Section 1031 Exchanges apply to income‑producing residential property—not personal residences—and require coordination with qualified tax and legal advisors to determine eligibility and structure.
For investment property, we provide education and coordination throughout the Section 1031 Exchange process. Eligibility depends on how the property is held and is determined in consultation with the client’s tax and legal advisors.
Only real estate held for investment or business purposes may qualify. Personal residences generally do not qualify.
In order to participate in a 1031 exchange, you’ll need a property you plan to sell, a replacement property, and a Qualified Intermediary. However, you don’t need to have all these things already in order to get started.
We have a history of working with JTC Americas, who can serve as your Qualified Intermediary. JTC has decades of experience with 1031, and wrote a set of best practices that is now the industry standard.
This is where you sell your current property, then find a replacement property to purchase with the proceeds.
This is where you first find a new property to purchase, then sell your current property within the required time frame.
What does “like-kind” mean?
A “like-kind” property can refer to any real property purchased for business or rental purposes, and
the replacement property does not necessarily have to be exactly the same in terms of usage, housing type, or value.
What is the time frame for an exchange?
The replacement property must be found within 45 days and purchased within 180 days.
Who can participate in a 1031 Exchange?
Anyone selling an investment property who plans to purchase a replacement property can qualify for
1031. There are specific rules regarding use of the property and when it must be purchased, but as
of now there are no limits based on an individual’s income (though this may change in the future).
What is a Qualified Intermediary?
The Qualified Intermediary holds the proceeds from the initial sale until the purchase of the replacement property. A QI is required for all 1031 transactions.
If you'd like to learn more, book a complimentary call with Scott Coulter, SVP Chief Wealth Planning Officer, today.
*Osaic Institutions and Ledyard Bank are separate companies. Investment and insurance products and services are offered through Osaic Institutions. Member FINRA/ SIPC. Osaic Institutions and the bank are not affiliated. Products and services made available through Osaic Institutions are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.
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