When you sell a piece of real estate, you hope to make as much profit as possible. But with the capital gains taxes assessed on the sale, you may end up owing more than anticipated. A high capital gains tax bill may even be enough to dissuade you from selling your property. A 1031 exchange can solve many of these problems for you. In this article, we are going to talk about how a 1031 exchange can help you defer capital gains taxes when selling real estate.
Using a 1031 Exchange to Defer Taxes
A 1031 exchange is a great tool you have at your disposal to defer taxes on the sale of real estate. How, you ask? Instead of selling your property outright, taking the net proceeds, and paying the required capital gains taxes, you can reinvest your net proceeds into a like-kind replacement property. This is the 1031 exchange in a nutshell. No, you don’t get to pocket the sales proceeds, but you do get to defer a potentially huge capital gains tax hit. As an added bonus, you get to keep your money working for you in a continued investment property.
Capital Gains Tax Deferral
Capital gains taxes can really add up when selling real estate. Why not defer those taxes and keep your money working for you in a continued investment? That’s what a 1031 exchange allows you to do. Reach out to the qualified intermediaries at Commercial Partners Exchange Company to learn more about the benefits of a 1031 exchange and to see if your property is a good fit. Our main office is located in downtown Minneapolis, but we work with clients throughout the state of Minnesota, and around 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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