How to Avoid Capital Gains Taxes When Selling Appreciated Investment Property
Ellen Levy
Tuesday, February 15, 2022
Tax Deferred Exchanges
For investors who have owned rental property for long enough to see their value soar, there is a valid concern about the amount of capital gains tax to be paid if they want to sell and cash in on their profit. A 1031 tax-deferred exchange (also called a Starker Exchange) is an extremely powerful tool for real-estate investors who want to defer the taxes that would typically be owed when selling an investment property. This significantly amplifies the working capital available toward their next investment property. There are many types of 1031 exchanges (Simultaneous, Delayed, Improvement, & Reverse). Consult a real estate agent who is knowledgeable about the 1031 rules and a Qualified Intermediary (QI) to make sure you do things correctly.
For investors who have owned rental property for long enough to see their value soar, there is a valid concern about the amount of capital gains tax to be paid if they want to sell and cash in on their profit. A 1031 tax-deferred exchange (also called a Starker Exchange) is an extremely powerful tool for real-estate investors who want to defer the taxes that would typically be owed when selling an investment property. This significantly amplifies the working capital available toward their next investment property. There are many types of 1031 exchanges (Simultaneous, Delayed, Improvement, & Reverse). Consult a real estate agent who is knowledgeable about the 1031 rules and a Qualified Intermediary (QI) to make sure you do things correctly.
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