The concept of tax-deferred exchanges under Section 1031 of the Internal Revenue Code has been used for many years by savvy real estate investors and individuals.

While the concept of the 1031 exchange is relatively easy to understand, this favorable approach to tax planning has been overlooked by many investors who have not considered purchasing seniors housing assets and by many sellers of seniors housing product who could defer a portion of their gains by utilizing this vehicle. Here's how it works: if a taxpayer exchanges current property for "like-kind" replacement property there is no immediate capital gains tax consequence resulting from the transaction. “Like kind” refers to the nature or character of the property, not its grade or quality. In essence, seniors housing assets can be exchanged for other income producing assets.

For seniors housing owners, the 1031 approach can represent significant value enhancement—making feasible many deals that otherwise would not be financially desirable. Accordingly, SHIA has built a significant presence in this emerging business. We have combined our skills in transaction facilitation with some of the best 1031 legal, regulatory, and financial intermediary resources. Please contact us to find out if a 1031 approach is appropriate for any of the transactions that you are currently contemplating.