031 Exchange: Section 1031 of the Internal Revenue Code allows corporations, institutions, and private investors to execute strategic transactions and grow their asset base through a tax-deferred exchange of like-kind property used for investment purposes or for productive use in trade or business - a 1031 exchange. 1031 exchanges have become a growing and integral strategy in the commercial net lease business. 1031 transactions allow exchangers to relinquish their property, leverage their equity to acquire replacement property, and defer capital gains tax that would otherwise be recognized.

1031 transactions allow the exchanger to defer capital gains tax treatment if the replacement property satisfies three general rules:

1. replacement property is of the same or greater value as the relinquished property,
2. all equity is reinvested into the replacement property, and
3. replacement property is subject to the same or greater amount of debt

In addition to deferring capital gains tax on the disposition of relinquished property, 1031 exchanges provide investors several business and strategic advantages:

1. restore depreciation deductions
2. maximize/minimize cash flow
3. increase leverage
4. increase appreciation rate
5. asset relocation
6. diversify or consolidate portfolio
7. reduce management responsibilities
8. estate planning
9. ownership restructuring

Whether it's the disposition of relinquished property, or identifying, negotiating and closing replacement property, First Oxford combines its real estate and financial experience to advise clients in executing commercial net lease 1031 exchange transactions.