Real estate investors are always on the lookout for opportunities to maximize their profits. One way to do this is by taking advantage of tax loopholes that can save them money in the long run. One such loophole is the 1031 exchange, also known as a like-kind exchange. In this article, we will explore what a 1031 exchange is, how it works, and the benefits it can provide to real estate investors.
What is a 1031 exchange?
A 1031 exchange is a tax strategy that allows real estate investors to defer capital gains taxes when selling a property and acquiring a replacement property of equal or greater value. The name “1031 exchange” refers to Section 1031 of the Internal Revenue Code, which outlines the rules and requirements for this type of transaction.
