What is a 1031 Exchange and How Does it Work?

Selling a property, building, or investment-related real estate is a significant step for investors, especially when it’s the first time selling. What many beginners aren’t aware of are the major tax implications and opportunities to defer capital gains tax.

1031 exchange

The 1031 exchange under the Internal Revenue Code is perhaps the most important piece of the real estate investment puzzle; it can save you 15-20% of your sale by deferring capital gains taxes. By reinvesting the proceeds correctly, investors can maximize the benefits of this tax-deferral strategy and continue building net worth.

This article explores questions you may have like what is a 1031 exchange, how it works, and what are the rules or timeline.…

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