Why You Should Consider a 1031 Exchange

If you are a real estate investor unfamiliar with the concept of a #1031 exchange, you may be wondering what all the fuss is about. But when you understand what this powerful investment tool can do for you, you may be wondering why you didn’t get involved with it sooner.

If you decide to sell or transfer investment real estate for gain without benefit of a 1031 exchange, the profit you make will usually be subject to taxation (capital gains taxes). In some cases, this tax obligation could reach up to 40 percent.

However, if you sell/replace the property with a 1031 exchange, then you can defer any capital gains tax liability and keep all the property’s equity for re-investment. This allows you to potentially obtain a replacement property that offers better cashflow, lower management obligations, a better location or any other investment goals you have.

If you are planning to sell or trade investment property in the future, before you pull the trigger it pays to discuss your 1031 exchange options with an experienced professional accountant or qualified intermediary.

If a 1031 exchange is in your future, visit our website to learn more about these powerful tax deferral tools and our qualified intermediary and replacement property locator services.