1031 Exchange of Real Property for Oil and Gas Royalty Interests

Investors are often unaware they can sell their real property and 1031 exchange a portion of the their investment into oil or gas producing wells without paying any tax on the profits from the sale of their real estate property pursuant to Section 1031 of the Internal Revenue Code. 

The Internal Revenue Service classifies real property and royalty interests in oil and/or gas properties as "like kind replacement property" for 1031 exchange treatment. You can generally purchase either a working interest or a royalty interest in oil and gas wells. 

The 1031 exchange is one of the most valuable strategies because it allows you to defer the payment of inocme taxes, keeping all of your equity (cash) working for you, and thereby increasing the value of your investments and networth.