1031 exchanges of investment real estate offer many benefits to taxpayers looking to sell real property. In this article, we are going to discuss a few of those benefits and talk about three reasons to do a 1031 exchange of investment real estate.
Defer Your Capital Gains Taxes
First and foremost, a 1031 exchange allows you to defer your capital gains tax burden when selling investment real estate. In a standard real estate sale, you need to pay capital gains taxes on the sales proceeds. This can be a hefty tax burden. A 1031 exchange allows you to defer that tax burden and avoid a potentially huge tax bill. In order to defer your capital gains taxes in a 1031 exchange, you need to reinvest your net proceeds from the sale into a new replacement property.
Diversify your Portfolio
A 1031 exchange also offers a great method for diversifying your real estate investment portfolio. With a 1031 exchange, you can diversify into different asset classes, alternative market segments, and geographical areas.
Sell Your Vacation Home
A vacation home can be exchanged in a 1031 transaction. However, there are additional restrictions on 1031 exchanges of vacation homes that you should be aware of before starting the process.
Contact a 1031 Exchange Professional
If you are interested in learning more about the tax-saving benefits of a 1031 exchange, contact a qualified intermediary today. At CPEC1031, LLC we make the 1031 exchange process as painless as possible. Our team of professionals can guide you through the process, prepare your necessary documents, and answer any questions you have along the way. Reach out to us today to learn more about our services and how we can help with 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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