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and now three, two, two one here we go.

We started from the bottom now we hit.

Hello Thrive Nation. This is your humble host, Clay Clark. I'm here off the coast of

San Diego at the Hotel Del. With Michael, there is no real estate topic to obscure

beer talking about this little thing called the 1031 exchange.

Now before you go freaking out, before you go, what is this?

You want to make sure that you understand.

I'm going to read the definition and then he's going to explain to us what it means in layman's terms that I can get it.

And if I can get it at a third grade level I know you can get it. So here we go. The 1031 exchange. This is is sort of a lengthy description, so I'm going to read it to you.

Definition. Under the Section 1031 of the Internal Revenue Code, like kind property used in a trade or business or held as an investment can be exchanged tax deferred.

Under a fully qualified Section 1031 Exchange, real estate is traded for other like kind property.

All capital gains taxes are deferred until the newly acquired real estate is disposed of in a taxable transaction.

The underlying philosophy behind the deferral of capital gains taxes is the taxation should not occur as long as the original investment remains intact

in the form of like kind real estate like kind refers to the real property as such rather from the

quality or quantity of property blah blah blah what does this mean it is a great thing

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