The Orginial Realty Investing Magazine
If you have a piece of investment or business real estate you no longer want, what are your options? You could sell it outright and take the immediate tax hit. Or you could consider a #1031 exchange.
If done correctly, a 1031 exchange allows an investor to defer paying all the capital gains taxes, which equates to a long-term and interest-free loan from the IRS. Nice, right? In addition, the investor then has all their gross net equity available to reinvest so they can acquire bigger and better real estate. This would not be possible if they had simply sold outright and paid taxes on the sale.
So the real advantage of a 1031 exchange is not deferral of capital gains. It is the immediate increase in purchasing power generated by the tax savings. This allows you to jumpstart your real estate investment portfolio and move on to bigger and more lucrative properties faster.
If a 1031 exchange is in your future, visit our website to learn more about these powerful tax deferral tools and our qualified intermediary and replacement property locator services.