1031 exchanges of real estate are beneficial for the taxpayer conducting the exchange, as well as the economy as a whole. But many people may not understand why that’s the case. In this article, we are going to explain why 1031 exchanges of real estate benefit the economy.
First and foremost, 1031 exchanges encourage investment in real estate. The ability for taxpayers to defer their capital gains taxes makes re-investing very attractive. Selling a piece of real estate can result in a hefty tax bill on the capital gains from the sale. A 1031 exchange allows taxpayers to defer that tax burden, and continue their investment in another property.
Consider the situation from the perspective of an investor. If the 1031 exchange did not exist and you were required to pay your capital gains taxes, you may hesitate to sell your property. But by doing a 1031 exchange, you can avoid a tax hit with the incentive of reinvesting your funds in bigger, better property. This keeps money moving around the market and stimulates growth!
Real Estate Exchanges in Minnesota
At Commercial Partners Exchange Company, we work with taxpayers large and small in numerous industries to facilitate the like-kind exchange of real estate under Section 1031. A 1031 exchange can save you a lot of money in capital gains taxes when you’re selling real estate. It allows you to keep your money working for you in a continued investment. Contact our qualified intermediaries today to see if you are a good candidate for a 1031 real estate exchange. We have decades of experience advising clients through every step of the 1031 exchange process.
- 1031 Hotline: If you have questions about 1031 exchanges of real estate, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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