Selling a piece of real estate is often a daunting task – with a lot of variables to consider throughout the process. But a lot of taxpayers aren’t aware of the full range of options available to them when it comes to selling real estate. In this article, we are going to talk about some tax-saving real estate strategies – specifically the 1031 exchange – that you can use to your benefit when selling real property.
Selling vs. Exchanging
The most obvious way to sell real estate is to engage in a straight-forward sale. In this situation, the owner sells the property and receives the net proceeds from the sale. What many taxpayers don’t consider is the potential capital gains tax bill from such a sale. Those sales proceeds do not all go into your pocket – you have to pay potentially hefty capital gains taxes on them. This can result in an unexpected tax bill, and even dissuade some taxpayers from selling.
If that sounds like you, a 1031 exchange may be right up your alley! With a 1031 exchange, you get to defer your capital gains taxes on the sale of real estate. The catch is that you have to reinvest those net proceeds into a replacement property. The benefit is that you get to defer a potentially huge capital gains tax bill.
Save on Taxes with a 1031 Exchange!
Selling a piece of investment real estate in the near future? Consider the tax-saving benefits of a 1031 exchange! The qualified intermediaries at Commercial Partners Exchange Company can help you through all the details of your 1031 exchange. Contact us today to learn more about the 1031 exchange process and how we can help you save tax dollars on your next real estate sale! Our primary office is located in downtown Minneapolis, but we work with clients across the United States.
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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