How to Get Out of an Inherited 1031 Investment Property

Inherited Property

If you’ve inherited an investment property you’re probably wondering what to do with it. Should you keep it? Should you sell it? What are your options? In this article, we are going to talk about your various options when it comes to inherited investment property.

Inherited Property 1031 Exchanges

One of the greatest benefits of a 1031 exchange is that you can defer your capital gains taxes indefinitely by continuing to exchange into newer replacement properties. Many taxpayers do this and then pass along their 1031 investment property to their heirs.

If you decide you do not want to maintain the inherited 1031 property, you can certainly sell it. However, that may not be the most tax-advantageous option at your disposal.

Consider the Most Tax Advantageous Option

Before you jump ship on your inherited 1031 exchange property, take a step back and consider your options. It’s possible that maintaining the property and doing a subsequent 1031 exchange is the most tax-advantageous option available. If you decide to sell the property in an outright sale, you will be subject to capital gains tax on the sale. If you do a 1031 exchange, you can defer these taxes and keep your money working for you.

Real Estate Exchanges Under Section 1031

1031 real estate exchanges can be very tax-advantageous, as they allow you to defer your capital gains tax on the sale of a piece of real estate. Instead of writing a check to the government, you can move the net proceeds from your sale into a replacement property – thus keeping your money working for you in a continued investment. For more information about the 1031 exchange process and how it can benefit you, contact the qualified intermediaries at Commercial Partners Exchange Company today!

  • 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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