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Did you know you’ll pay taxes if you own an investment property and sell it for a profit? Did you also know that you could defer those taxes by doing a Section 1031 transaction?
It sounds so formal, but all it means is that you use the funds from selling the investment property you own now to buy another property.
Why do this?
So you don’t have to pay taxes, at least right now.
Here’s how it works.
First, you sell your property. Next, you work with a Section 1031 intermediary and find a replacement property worth at least as much as your sold property.
The key is to buy a property soon enough to be counted as a Section 1031 transaction. The rules are complex, which is why a Section 1031 intermediary is essential. Your intermediary can be a lawyer, bank, or a Section 1031 company.
The Section 1031 rules only apply to real estate properties. The Tax Cuts and Jobs Act eliminated the use of the law for any personal property.
Contact me today if you’d like to learn more about the Section 1031 rules, how they work or how you can benefit.