1031 exchanges are great for the economy, but many people don’t know why that’s the case. In this article, we are going to explain how 1031 exchanges are effective at stimulating growth in the US economy.
1031 exchanges incentivize investment in real estate. A huge capital gains tax bill is often a big deterrent for an investor when considering a real estate sale. Since section 1031 allows investors to defer this potentially large tax windfall, it incentivizes them to sell their property and reinvest their capital into a new real estate investment.
Moving Capital Around
This has the added bonus of keeping capital moving in the real estate industry. When capital gains taxes are scaring off sellers, the market can become stagnant. 1031 exchanges offer a good reason for investors to reinvest their net proceeds from a real estate sale into a new replacement property.
1031 exchanges are also a great method for creating jobs – particularly when it comes to build-to-suit exchanges. These exchanges involve adding construction improvements to the replacement property. The catch is that these improvements need to be finished in a short time period – which means a lot of great construction jobs can be created very quickly.
Like-kind exchanges of real estate are great for taxpayers and the economy as a whole. Let us help you save money in capital gains taxes with a 1031 exchange. Our qualified intermediaries have twenty years of experience working on 1031 exchanges all over the country. We can prepare all of your documents, advise you on replacement property, and answer all of your questions. Give us a call today to discuss the specifics of your 1031 exchange. Our primary office is in downtown Minneapolis, but we work with taxpayers throughout 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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