Deferring Taxes for Real Estate Portfolio
Hello Everyone,
I know the 1031 exchange is used to defer the capital gains under the condition you use it to buy another home. Is there a tax strategy for using capital gains off the sale of a home to pay off other homes in your portfolio to improve cashflow? Thoughts?
California !
Best,
GZ
Most Popular Reply
Unfortunately not, Gabriel. 1031s are quite strict, and involve equal “equity” deployed in order to persevere the gain deferral.
That said, if you’re okay with realizing *some* capital gain on boot / mortgage boot, you can pull *some* cash from the 1031 exchange. You would need an exceptional grasp on what the 1031 will cost and the amounts you’re dealing with on the replacement and relinquished properties.
- REI CPA in CA