There are many benefits to doing a 1031 exchange (instead of selling) your real estate. But many investors are still hesitant to exchange their property in a 1031 transaction. In this article, we are going to walk through four reasons why it’s a good idea to 1031 exchange your real property.
Keep your Money Working
Typical real estate transactions involve hefty capital gains tax bills. With a 1031 exchange, you can avoid paying these taxes and use your net proceeds to purchase better investment property.
Compound Your Wealth
A 1031 exchange allows you to maximize your gain by moving your equity into the best investments available to you.
Get Rid of Troublesome Properties
If you have an older property that requires a lot of maintenance or management, a 1031 exchange can allow you to exchange out of that property and into a newer property that is less intensive from a management perspective.
Diversify Your Portfolio
1031 exchanges can be done between different business segments and geographic areas. They are a great way of diversifying your portfolio and expanding your investments.
St. Paul Like-Kind Exchange Company
If you’re selling real estate and want to avoid getting hit with a capital gains tax windfall – consider the 1031 exchange, which allows you to defer those taxes and maximize your gain. With decades of experience, our qualified intermediaries are well versed in the like-kind exchange process and can help ensure your exchange goes off without incident. Give us a call today to set up an appointment with a Minnesota qualified intermediary at our downtown Minneapolis office.