A Section 1031 like‑kind exchange allows owners of business or investment real estate to defer capital‑gains tax when they reinvest proceeds into similar property. It’s a tax‑deferral mechanism—not tax‑free—because any gain deferred in the exchange will be recognized when you eventually sell without reinvesting. Both the relinquished and replacement properties must be held for business or investment use; personal‑use homes don’t qualify. The properties must be like‑kind—real estate is generally like‑kind to other real estate—but U.S. property is not like‑kind to property outside the United States. Property held primarily for sale, inventory, stocks, bonds and partnership interests are excluded.

The simplest 1031 exchange is a simultaneous swap—two properties are exchanged at the same time. More commonly, investors use a deferred exchange: you sell the relinquished property and have up to 45 days to identify replacement properties and 180 days to complete the purchase. A reverse exchange is the opposite—you acquire the replacement property first and dispose of the old property within 180 days, using an exchange accommodation titleholder to park the property.

A disciplined approach helps ensure your exchange qualifies for tax deferral. Step 1: Sell your relinquished property and place the proceeds with a qualified intermediary to avoid constructive receipt:contentReference. Step 2: Within 45 days, identify up to three potential replacement properties in writing and deliver the notice to the appropriate parties:contentReference. Step 3: Close on the replacement property within 180 days of the sale (or the due date of your tax return, whichever is earlier); the property acquired must substantially match what you.

Many real‑estate developers choose S corporations for their pass‑through taxation and liability protection. S corporations avoid the double taxation of C corporations by reporting income and losses on shareholders’ individual returns, and they can limit personal liability for business obligations. However, there are strict requirements—such as limits on the number and type of shareholders—so consult a qualified advisor when selecting an entity structure.

Competitive bidding and careful contract selection can significantly influence a project’s cost and tax outcomes. Fixed‑price, cost‑plus, and design‑build contracts each carry different risk allocations, accounting treatments and tax implications. Engaging experienced professionals during contract negotiations helps ensure you choose the best structure for your goals.

Accurate cost‑of‑work definitions ensure proper allocation of expenses between capital improvements and deductible operating costs. Clear definitions support job costing, facilitate compliance with accounting standards and tax rules, and reduce the likelihood of disputes with contractors or regulators. We help you implement cost‑tracking systems that stand up to scrutiny.

1031 exchanges and construction tax strategies are complex and time‑sensitive. Working with experienced teams—CPAs, attorneys, and qualified intermediaries—helps you navigate requirements, meet deadlines, and avoid costly mistakes. RC Tax Solutions collaborates with trusted professionals to structure transactions and provide guidance tailored to your projects.