What Is a 1031 Exchange?
A 1031 exchange allows investors to defer capital gains taxes by reinvesting proceeds from a real estate sale into a similar or "like-kind" property.
Benefits of a 1031 Exchange
Defer capital gains taxes indefinitely.
Preserve more capital for reinvestment.
Leverage larger properties with tax-free growth.
Continue exchanging until passing assets to heirs with a step-up in basis.
1031 Exchange Rules
Like-Kind Property Requirement: Must reinvest in another real estate asset.
45-Day Identification Period: You must identify new properties within 45 days of selling.
180-Day Closing Window: You must close on a new property within 180 days.
Qualified Intermediary Requirement: The exchange must be facilitated by a third-party intermediary.
Final Thoughts
A 1031 exchange is one of the most powerful tools for tax-free wealth building in real estate. Working with experienced advisors ensures compliance and maximized benefits.
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