1031 Starker Exchange - Some insights
The Federal Government’s rationale for allowing a 1031 starker exchange is to encourage the growth of businesses, by not letting them be unnecessarily encumbered by tax burdens, provided that the earnings from a sale are to be invested immediately in a like property to be used for business. The wording of the law is such that if one does not really intended to go into business, one will be quite hard pressed to avail of any sort of protection this kind of law might offer. Personal properties for example, are not subject to this sort of tax protection. Only properties to be used in business or intended to be used as investments may actually benefit from this federal law.