Many property investors utilize 1031 exchanges as a strategy to defer taxes. A 1031 exchange allows them to sell an investment property and purchase a like-kind property, deferring the capital gains tax on the sale. Successfully executing a 1031 exchange can free up cash, enabling investors to explore new real estate opportunities.
If you’re considering a 1031 exchange, it’s important to understand key aspects of the process. This guide outlines essential information about 1031 exchanges, including the specific rules involved, as well as the potential benefits and drawbacks.