Reinvest 1031 proceeds with
our
help
A 1031 exchange is a tax-saving tool available to all taxpayers who own
investment or business real estate. With a 1031 exchange, you can defer
your capital gains taxes when selling your property and keep that money
working for you by reinvesting it into a bigger, better replacement
property.
Learn more about the tax-saving benefits of 1031 exchanges below.
How 1031 Exchanges Work
In the simplest terms, a 1031 exchange allows any United States taxpayer
to defer their capital gains taxes on the sale of their investment real
estate. The catch is that you must reinvest your net proceeds from the
sale into a replacement property. It’s a continuation of your
investment, rather than cashing out in a straightforward sale of the
property.
In order to defer your capital gains tax burden with a 1031 exchange, you
have to abide by various requirements:
-
1031 Exchange Deadlines. 1031 exchanges are governed by
strict timeframes. You have only 180 days total to complete your exchange
once you begin the process. In addition to that, you only have the first
45 of those days to identify your replacement properties.
-
Qualifying Like-Kind Property. You can only use certain
types of property in a 1031 exchange. All property involved in a 1031
exchange must be real property (personal property is not allowed) that is
held for investment or business purposes. Also, all property must be
"like-kind"
The Benefits of Conducting a 1031 Exchange
Savvy investors have been harnessing the power of 1031 exchanges for
decades, but many people are unaware of the true benefits of section
1031:
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Defer Your Capital Gains Tax. The biggest benefit of
section 1031 is the deferral of capital gains taxes. As long as you
satisfy all the requirements and meet all of your deadlines, you can defer
a potentially huge capital gains tax bill.
-
Build Your Wealth. Rather than paying out those capital
gains taxes as you would in a straightforward sale, a 1031 exchange keeps
your hard-earned capital working for you in a continued investment that
builds your wealth over time.
-
Exchange Into Different Geographic Areas & Industry
Sectors.
A 1031 exchange is a great opportunity to move into different geographic
areas or industry sectors. You can sell a retail space in Minnesota and
exchange into a rental property in Florida.
1031 Exchange Resources & Links
Here are some free online resources and links that you might find helpful
as you consider a 1031 exchange of your investment property:
Start Your 1031 Exchange of Investment Real
Estate
If you are interested in learning more about how you can save money in
capital gains taxes with a 1031 exchange, reach out to us today! We work
with Jeff Peterson of
CPEC1031, LLC for
all our 1031 exchange needs. Jeff is a 1031 exchange intermediary with
more than two decades of experience facilitating exchanges across the
United States.
