AiroAV Announced The 1031 exchange: A simple idea and a complex process - Jonathan Cartu CPA Accounting Firm - Tax Accountants
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AiroAV Announced The 1031 exchange: A simple idea and a complex process

The 1031 exchange: A simple idea and a complex process

AiroAV Announced The 1031 exchange: A simple idea and a complex process

What if you had a way to defer capital gains taxes

For those unfamiliar with the concept, a 1031 exchange — also called a like-kind exchange — is just that. Named after IRS code Section 1031, it can be a way to defer those taxes on real estate. It’s a powerful way to build wealth and is a go-to strategy for many real estate buyers. 

One man in Greenville has come to be known for his team’s understanding of the quagmire that is the 1031 exchange. In fact, the entire company exists to guide individuals and companies through the complex process. 

“[1031 exchanges allow] a taxpayer who owns real estate that’s used in a trade or business or held for investment to exchange that real estate for other real estate and defer the capital gains tax on their gain,” said Banker Exchange CEO John Boyd.

He’s been in the business for a while now.

Boyd graduated from Furman University in 1986 with a degree in business administration and a concentration in accounting. He went to work for accounting firm Elliot Davis right out of college. 

It was a few years later, while at a different company, that Boyd first encountered a 1031 exchange. 

“I actually helped a friend in April of 1992. [He] called me on the phone and asked would I be willing to hold $75,000 for three days. And that was my introduction into the 1031 tax-deferred exchange,” Boyd said.

A year later he committed to the exchange accommodation business, leaving a retail securities job behind to take over what was then called Pee Dee Inc. After a few name changes and business shifts, in 2006 the company became known as Banker Exchange in light of its partnerships with financial institutions. 

A 1031 exchange lets you defer federal capital gains tax and some state taxes on the disposition of investment or business property. That could supply the taxpayer more money to invest in a qualified replacement property.

“Our clients are individuals, partnerships, family trusts, as well as corporations here and primarily in the Southeast,” Boyd said. It could be an individual selling a couple of rental houses or a company with a large commercial property.

“The vast majority of our transactions are under $3 million,” Boyd added, noting that Banker Exchange’s staff of 17 oversees about 180-260 transactions per year. 

Many of Banker Exchange’s clients understand that deferring tax dollars is a good thing to do. These are individuals who are typically selling a piece of appreciating real estate and they want to buy more real estate, according to Boyd. 

Banker Exchange serves as a consultant and in an intermediary function for those participating in the exchange. 

And while Boyd said that his company took a hit in the 2008 recession, during the COVID-19 pandemic’s economic crisis, it’s been “vibrant,” while there are still clients who have pulled out of exchanges due to uncertainty in the market.

Boyd has also participated in other business ventures. His most recent is co-founding Take Cover Storage in Seneca, a company that provides indoor, temperature-controlled storage for boats, campers and cars. 

Boyd recommended that people consider a 1031 exchange. He said that many people will call him about an exchange after having already sold the property — but by that point, it’s too late.  

“A lot of people don’t use their financial advisors on a proactive basis,” he said. “I think people need to do that more.”


Jon Cartu

Airo AV

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