1031 Exchange vs Real Estate IRA

Both 1031s and real estate IRAs use property for investment purposes and offer tax-sheltered benefits. However, there are differences in these options investors should understand to determine which transaction best fits their needs.

1031 Exchanges
Real Estate IRAs
Deadlines to adhere to and holding period No deadlines or holding period
1031s allow investors to exchange like-kind property and avoid capital gains taxes, provided the new property is of equal or greater value than the property being exchanged. IRAs utilize real estate assets to build wealth specifically for retirement.
While investors may exchange a property for one or multiple properties, if the total of these new properties does not match or exceed the value of the original property, taxation on the difference in value/cost comes into play. Income gained from the sale of property in an IRA reverts directly into the retirement account on a tax-free or tax-deferred basis.
Some personal use allowed No personal use

Midland IRA and 1031 is knowledgeable and experienced in performing 1031 exchanges and facilitating administrative aspects of real estate IRAs and other self-directed retirement plans.

Contact us today to discuss investment vehicles that best suit your needs and goals.