Real estate investors use 1031 exchanges to reap the main benefit of deferring capital gains tax. Exchanges allow this deferment, along with the deferment of other taxes upon the sale of investment property. The savings can be huge. And, there are 5 benefits of a 1031 exchange besides deferring taxes that investors enjoy, as well.
The deferment of taxes helps investors build more capital to invest. The benefits listed below present an additional attraction and investing flexibility. But, it is critical to understand certain regulations apply. There are timing rules in which your property must be exchanged. There are also limits on the types of property that can be exchanged. Internal Revenue Code section 1031 explains the allowances in great detail.
Savvy investors use 1031s for many reasons besides deferring taxes.
Besides these 5 benefits of a 1031 exchange, there are additional advantages that may suit your individual investing goals. Download our free 1031 Exchanges Made Easy Guide or contact Midland today. We perform hundreds of exchanges every year for our clients. We’ll help you determine if this investing maneuver is the right technique for you.
Midland is a qualified intermediary with Certified Exchange Specialists® on staff to ensure all elements of your exchange are performed seamlessly and in compliance with IRS regulations.