With a potential recession looming on the horizon, many real estate investors are weighing their options. While selling and sitting on your property are both viable options, a 1031 exchange is another option that many investors don’t consider. In this article, we’re going to explain the benefits of conducting a 1031 exchange in a recession.
Defer Your Taxes
The biggest benefit of a 1031 exchange (in a recession or an economic boom) is that it allows you to defer your capital gains taxes when selling real estate. These taxes can add up to a hefty bill, depending on your specific property – so much so that they often deter owners from selling at all. Well, a 1031 exchange incentivizes you to sell your property by removing this tax liability.
Replacement Property Opportunities
A recession may bring the total value of your property down, which can make investors hesitant to sell. However, that decreased sales price would also apply to any potential replacement property – meaning a recession may be a good time to purchase new replacement property at a lower price. A 1031 exchange would allow you to do that while simultaneously deferring your capital gains taxes.
Save Money in Capital Gains Taxes
Looking to save money in capital gains taxes when selling real estate? Then a 1031 exchange might be right for you! By reinvesting your sales proceeds into a replacement property, a 1031 exchange allows you to defer your capital gains taxes on the sale of real estate. The qualified intermediaries at CPEC1031 have over twenty years of experience facilitating exchanges of all shapes and sizes. Let us help you through the ins and outs of your next like-kind exchange!
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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