Maximizing Your Returns: How a 1031 Exchange Can Help You Defer Capital Gains Taxes and Upgrade Your Real Estate Portfolio with Realty Standard
A 1031 exchange, also known as a tax-deferred exchange, is a way for property owners to sell a property and reinvest the proceeds into a new property, while deferring the payment of capital gains taxes. This can be a powerful tool for real estate investors looking to upgrade to a larger property, diversify their portfolio, or relocate to a different market. At Realty Standard, we can help you source deals and have extensive experience working with investors using this method.
When conducting a 1031 exchange, it’s essential to work with a qualified intermediary, who will act as a facilitator between the sale of the old property and the purchase of the new property. The qualified intermediary will hold the proceeds from the sale of the old property and use them to purchase the new property on behalf of the investor.
There are several rules and regulations that must be followed when conducting a 1031 exchange, including strict timelines for identifying and purchasing the new property. The investor must identify the new property within 45 days of the sale of the old property and must close on the purchase of the new property within 180 days of the sale of the old property.
It’s also important to note that the new property must be of “like-kind” to the old property. This means that the new property must be used for the same purpose as the old property and must be of a similar nature or character. For example, if the old property was a rental property, the new property must also be a rental property.
At Realty Standard, we have a team of professionals such as a qualified intermediary, real estate attorney, and tax advisor who will help you navigate the process and ensure that you’re in compliance with all the rules and regulations.
A 1031 exchange can be a powerful tool for real estate investors looking to upgrade, diversify, or relocate their portfolio. At Realty Standard, we can help you source deals and have extensive experience working with investors using this method. It’s essential to work with a team of professionals, follow the strict timelines and regulations, and ensure that the new property is of “like-kind” to the old property. With the right guidance and preparation, a 1031 exchange can be a valuable strategy for deferring capital gains taxes and growing your real estate portfolio.