As an investor in commercial real estate, you may have heard the term 1031 exchange tossed around. But what is it, and what does it mean for you?
The most important thing to remember here is that a sale under Section 1031 allows for capital gains to be deferred, meaning taxes are still owed but not payable until later. It sounds almost too good to be true, and of course there are rules to be followed as discussed in this video.
If you’re considering a 1031 exchange, it’s essential to plan in advance of the sale to make sure that all deadlines can be met. With that said, though, this can be an effective way to leverage up your investment portfolio and keep growing your assets.