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Using a 1031 exchange to trade up your portfolio |
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1031 -
Tax Deferral
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If you are a real estate investor you can use the tax deferral gift from the IRS under a 1031 exchange to "trade-up" your real estate portfolio over time. This allows you over time to trade into higher valued investment properties with higher cash flow, and pyramid your investment growth over time.
Trading up under a 1031 exchange has alot of upside
- you can pyramid your investment into larger producing real estate assets without the normal tax erosion on your equity associated with a traditional sale
- you have the ability to improve the quality or location of the real esate asset without tax penalty
- you can continue trading up properties over time using the full amount of any capital gains towards your new real estate investment
- you can play the national real estate market to capture the best capital investment gains by moving your properties overtime from well established markets to the next hot and growing real estate market
- diversify your holdings by moving into Tenant In Common holdings
- minimize your property management headaches with Tenant in Common exchanges
Trading up can sense for long term investors
The 1031 Exchange tax deferred gift from Uncle Sam is still one of the most under-utilized tax pools today.
If you are or plan to be a serious real estate investor you owe it to yourself to explore the gift the IRS has given us under Section 1031.
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