Deferring Taxes for Real Estate Portfolio

[Gabriel Zepeda]

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

[Andrew Abeyta]

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