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By OLGA JIMENEZ, for e-1031mls.com 9/4/2007

If the transaction is properly structured, the seller's profit or gain is deferred to a future date.x While tenant in common investment ownership has been around for some time, the 2002 ruling allowed investors to feel confident that the IRS would allow the tenant in common structure for 1031 TIC exchanges, and this has ignited a cottage industry. The 1031 exchange is another. Many internet companies actually use the address of properties as domain names. To determine a fair sales price on your interest, a registered professional petroleum engineer performs an engineering and economic evaluation, such as analyzing historical production data, calculating production decline rates, and reviewing historical cash flows.On occasion, an investor must acquire a replacement property before disposing of the relinquished "sales" property. US banks have begun to give home loans for properties in Mexico, but, so far, not for other Central American countries. The costs you incurred to drill and develop the well site must be recaptured to the extent that you do not acquire qualified natural resource property.

Exchange opportunities in today's market

In addition, the debt on the new property must be greater than the debt on the old property or the amount of equity in the new property must be greater than the equity in the old property. The IRS limits the number of properties you may identify. The reasons for swapping real estate vary greatly. Generally, if you exchange business or investment property solely for business or investment property of a like-kind, no gain or loss is recognized under Internal Revenue Code Section 1031. You want to have something to draw from in the event that there is damage done to the premises while they are renting.

State by state: exchange

In an exchange, all proceeds from the sale of property are available to purchase other property. Individuals who are ready to relinquish the day-to-day burdens of being a landlord, or who own land and would like an income producing property, may benefit from TIC investments. There is usually a small amount left over as monthly profit for the investor (positive cash flow), but the greater investment payoff comes from building equity in the property using the lessee's rent money. You can purchase either working interest or royalty interest in oil and gas wells with money that you otherwise would have paid in taxes. The effect of this rule is that the exchangor uses the entire net proceeds from the relinquished property on the purchase of the replacement property. That's because the Taxpayer Relief Act of 1997, allowed the Tampa, Florida, couple to keep up to $500,000 on the sale of a primary residence every two years. Although owners of working interests in oil and gas properties are subject to the Alternative Minimum Tax, they are exempted from the passive income limitations.

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