Keep More, Invest Smarter: What you Need to Know- 1031 Exchanges

If you’re a real estate investor or thinking about becoming one, the 1031 Exchange is something you want to have in your toolbox. In simple terms, it allows you to sell an investment property and reinvest the profit into another property without paying capital gains taxes right away. Instead of handing a chunk of your earnings over to the IRS, you get to roll that money into a new investment and keep building your portfolio.

Let’s say you bought a rental years ago for $600K, and now it’s worth $ 900 K. Normally, you’d owe taxes on that $300K gain when you sell. But with a 1031 Exchange, you can reinvest all of it into another property and delay the taxes.

1031 Exchange allows you to scale, diversify, and upgrade your properties without losing money to taxes along the way. There are strict guidelines you will need to follow. For example, if you sell your investment property, then you have 45 days to identify a new one and 180 days to close on it. If you stick to the rules, you don’t owe taxes on your profit, at least not yet. That gives you more buying power to grow your investments faster. If you have any questions, please feel free to reach out to me @ 408 483 0719