1031 Tax Exchange Explained




1031 Tax Exchange Explained

It is the IRS approved method that enables you to sell your rental real estate rental real estate and reinvest in another rental real estate or rental real estate, deferring all federal (and most state) capital gains taxes. This transaction is authorized by internal revenue code and is one of the best options for real estate investors to rollover their investment rental real estate while preserving as much wealth as possible. By deferring any applicable taxes, the real estate investor has more money available to invest in other rental real estate. In effect, you receive an interest free loan from the federal government in the amount you would have paid in taxes.

When combined with a 1031 tax exchange, tenants in common rental real estate can be even more attractive. 1031 Tax Exchanges allow you to defer capital gains taxes by investing in a like rental real estate. When using tenants in common rental real estate with a 1031 tax exchange, you can defer capital gains while diversifying your investments. You can purchase shares of various tenants in common rental real estate in different locales with the proceeds of the 1031 sale.

If you are considering the sale of an investment rental real estate, contact a specialist today to discuss your 1031 tax exchange options.


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