1031 exchanges are good, not only for individual investors, but for the US economy as a whole. But not everyone understands why that’s the case. In this article, we are going to explore three ways in which 1031 exchanges are good for the economy.
Encouraging Investment & Reinvestment
1031 exchanges are great for the economy because they actively encourage investment and reinvestment. The tax deferral offered by section 1031 is very attractive to those who own investment real estate. Many real estate investors who would otherwise be reticent to sell due to their capital gains tax burden are spurred to exchange their property and lever up into a bigger replacement property with a 1031 exchange.
Moving Capital Around
Exchanging into bigger and better property keeps capital moving around into different geographic areas and industry segments. 1031 exchanges can be done between different states and different real estate sectors, making it easy for capital to go where it needs to be.
Spurring Job Growth
1031 exchanges also spur job creation and growth. Many occupations benefit from 1031 exchange activity, including real estate agents, CPAs, contractors, lenders, title closers, and more.
A 1031 Exchange Can Help You Save Money in Taxes
If you are a United States taxpayer, a 1031 exchange can help you save money in capital gains taxes when you sell qualifying real estate. What real estate qualifies for 1031 treatment? Any like-kind real property that is held for investment purposes or for use in your trade or business. Contact one of the qualified intermediaries at CPEC1031, LLC today to get more information about the like-kind exchange process and see how you may be able to benefit from section 1031 of the Internal Revenue Code.
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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