Investing in real estate can be very profitable, but that’s not a guarantee. You need to understand the market, know when to sell / buy, and much more. One of the best tools in a real estate investors arsenal is the 1031 exchange. In this article, we are going to discuss how to profit from real estate while simultaneously deferring taxes with a 1031 exchange.
The Purpose of Section 1031
The purpose of section 1031 of the Internal Revenue Code is to incentivize real estate investors to continue investing their money in the market (thus leading to overall economic growth as a result). There is also a direct benefit to the taxpayer conducting the 1031 exchange in that they are able to defer their capital gains taxes on the real estate sale and keep their money building wealth in a continuing investment.
The next time you’re thinking about selling a piece of real property – consider a 1031 exchange first. As long as you meet all the benchmarks, you can defer your taxes and keep your profits working for you in a bigger, better property.
Save Money on Your Next Real Estate Transaction
If you are looking to save money on your next real estate transaction, consider a 1031 exchange to defer your capital gains taxes. With more than 20 years of experience under our belts, our qualified intermediaries have the resources to ensure that your exchange goes off without a hitch. We can prepare all of your 1031 documents and answer any questions you might have. Contact our intermediaries today at our downtown Minneapolis office to get your exchange up and running.