Benefits of a 1031 Exchange
Deferring taxes can be a powerful tool for building wealth.
Leverage
With the funds saved by deferring capital gains and other taxes on the sale of one property, investors have increased funds available for the purchase of a larger property.
Diversification
Investors can expand the number or types of property in their portfolio, perhaps purchasing properties in multiple markets or states.
Consolidation
Investors can sell smaller properties and purchase one larger property to maximize ownership benefits and reduce management responsibilities.
Cash Flow
Investors can sell a property that is producing little or no income (such as land) and purchase property or properties with greater cash flow performance (such as a retail shopping center).
Management Relief
Investors who no longer want to manage high-maintenance properties can reinvest in properties requiring little or no management.
Increase Depreciation
Investors can exchange from a non-depreciable property (such as raw land) to a property that can be depreciated.
Estate Planning
Investors may continue to replace properties through consecutive 1031 exchanges, preserving profits until and estate can be passed down tax free (if under the tax cap).
Explore These Additional 1031 Exchange Topics
Types of Exchanges
Explore the various types of exchanges to better understand your options. Read more
Sample Savings
Read examples illustrating the savings realized through a 1031 Exchange. Read more.
Understanding 1031
Learn the key rules for successful 1031 real estate exchanges. Read more.
Benefits of a 1031 Exchange
Review the numerous advantages 1031 exchanges have to offer. Read more.
What to Expect In The 1031 Process
Learn what happens after you begin the 1031 Exchange process. Read more.
The 1031 Exchange Timeline
Put exchange timeframes into perspective with this helpful visual. Read more.
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