A 1031 exchange is a powerful tax tool that allows an investor to save on taxes after selling a piece of real estate. This tax deferral program permits the investor to sell one real estate property and then reinvest the funds into another higher performing property.
As a real estate investor, a 1031 exchange is one of the best tools you can utilize for building wealth and saving on taxes! On today’s show, you’re going to learn the rules, the timelines, and how to get started if you believe a 1031 exchange is the right strategy for you.
On this episode you’ll learn:
- When a 1031 exchange is appropriate.
- The importance of timing when doing a 1031 exchange.
- What not to do during a 1031 exchange.
- And much more!
When a 1031 Exchange Is Appropriate
A 1031 exchange is a great option for investors who have overvalued and/or underperforming properties. In a 1031 exchange, you can essentially swap properties for other properties of equal or greater value—without taking the tax hit. You can upgrade your assets and increase the cash flow in your portfolio by using this strategy.
The Importance of Timing When Doing a 1031 Exchange
This strategy involves strict guidelines, with no exceptions. The IRS requires that you identify a replacement property in 45 days, and you must complete the entire exchange within 180 days. You’ll work with a qualified intermediary during the process who can help you stick to these timelines.
What Not to Do During a 1031 Exchange
One of the biggest mistakes we’ve seen is when investors try to DIY a 1031 exchange. You cannot do this! You must work with a qualified intermediary who will guide you through the process. Our team has a 1031 service and we work with companies who can help. To learn more, you can schedule a free call at morrisinvest.com
Episode Resources
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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