If you’re interested in selling commercial or investment real estate that has appreciated significantly, one way to defer a tax bill on the gain is with a Section 1031 “like-kind” exchange. With this transaction, you exchange the property rather than sell it. Although the real estate market has been tough recently in some locations, there are still profitable opportunities (with high resulting tax bills) when the like-kind exchange strategy may be attractive.
Defer Capital Gains With Section 1031 Exchanges
If you’re a savvy investor, you probably know that you must generally report any mutual fund distributions as income, whether you reinvest them or exchange shares in one fund for shares in another. In other words, you must report and pay any capital gains tax owed.
But if real estate’s your game, did you know that it’s possible to defer capital gains by taking advantage of a tax break that allows you to swap investment property on a tax-deferred basis?
Realty Speak Real Estate Podcast: 1031 Like-Kind Exchanges
Don’t miss this episode of the Realty Speak podcast, featuring Bob Russo!