1031 Real Estate Exchange Explained

1031 Real Estate Exchange Explained

A 1031 real estate exchange is the IRS approved method enabling the deferment of federal (and most state) capital gains taxes through the sale and direct reinvestment of all proceeds into other like kind rental property rental property. By deferring any applicable taxes, the property owner has more money available to invest in other rental property. In effect, you receive an interest free loan from the federal government in the amount you would have paid in taxes.

When combined with a 1031 real estate exchange, tenants in common rental properties can be even more attractive. 1031 Real Estate Exchanges allow you to defer capital gains taxes by investing in a like rental property. When using tenants in common rental properties with a 1031 real estate exchange, you can defer capital gains while diversifying your investments. You can purchase shares of various tenants in common rental properties in different locales with the proceeds of the 1031 sale.

If you are considering the sale of an investment rental property, contact a specialist today to discuss your 1031 real estate exchange options.

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