1031 exchanges can benefit any US taxpayer who owns real estate that qualifies for like-kind exchange treatment. In this article, we are going to discuss a few of the many advantages of utilizing section 1031 of the Internal Revenue Code.
Tax Deferral
The biggest advantage of doing a 1031 exchange is the tax deferral that comes with it. By delaying your instant gratification of receiving net proceeds from the sale, a 1031 exchange allows you to defer your capital gains taxes and compound your wealth over time in a larger replacement property.
Asset Movement
A 1031 exchange also allows you to move real estate assets around into different business sectors or geographic areas. If you’re nearing retirement age and you want to sell a management intensive property (an apartment complex perhaps) and exchange into a more passive investment, a 1031 exchange is a great option.
Continuation of Investment
When you sell an investment property in a straight forward sale you pay a good chunk of change in capital gains taxes. In a 1031 exchange, that money continues to grow over time in a continued replacement property investment. This keeps your hard-earned money working for you.
Take Advantage of the Tax Deferral Offered by Section 1031
If you own investment or business real estate in the United States you can take advantage of the tax deferral offered by section 1031. A like-kind exchange can provide significant tax savings when selling qualifying real estate, so long as you hit certain benchmarks. To make sure you are abiding by all the rules and requirements, it’s important to work with a qualified intermediary who has experience in the 1031 exchange industry. Contact CPEC1031, LLC today for help with your 1031 exchange of real estate.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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