Defer Capital Gains Taxes on Investment Properties
Expert guidance through the complex 1031 exchange process. We coordinate with qualified intermediaries and help you find suitable replacement properties within IRS timelines.
Let's discuss your investment property and explore whether a 1031 exchange makes sense for your situation.
A 1031 exchange, named after Section 1031 of the Internal Revenue Code, allows real estate investors to defer paying capital gains taxes when selling an investment property, provided they reinvest the proceeds into a 'like-kind' replacement property.
Defer federal and state capital gains taxes by reinvesting in qualified replacement property.
Use tax savings to invest in higher-value properties and build wealth faster.
Exchange one property for multiple properties, or consolidate multiple into one.
Begin a new depreciation schedule on the replacement property.
Most common type. Sell your property first, then identify and purchase replacement property within IRS timelines.
45 days to identify, 180 days to close
Best for: Most investors - provides flexibility in finding replacement property
Close on both the sale of relinquished property and purchase of replacement property on the same day.
Same day closing
Best for: Coordinated transactions where both properties are ready to close
Purchase replacement property before selling your current property.
180 days total
Best for: When you find perfect replacement property but haven't sold yet
Use exchange funds to make improvements on replacement property.
180 days to complete improvements
Best for: Investors wanting to customize or develop replacement property
Understanding the timeline is critical - missing deadlines can disqualify your exchange and trigger tax liability.
Contact qualified intermediary (QI), review investment goals, identify potential replacement properties.
Sale closes and proceeds go directly to QI. Clock starts ticking. Do NOT receive proceeds directly.
Must formally identify up to 3 replacement properties (or more under 200% rule). Written notice to QI required.
Negotiate, inspect, and close on replacement property. QI uses exchange funds for purchase.
Must close on replacement property by day 180 OR your tax return due date (whichever is earlier).
Here's how a 1031 exchange can save substantial money compared to a taxable sale:
Total Tax Due: $154,500
Total Tax Due: $0
Savings: $154,500
This is a simplified example. Actual tax liability depends on many factors. Consult with your tax advisor.
