Investing in property is an excellent wealth-building strategy that enables individuals to build their net worth through passive income. But if an investor decides to relinquish their property, they may not realize their level of exposure to Uncle Sam. Real estate transactions require the payment of a capital gains tax, which could consume up to 20% of the profits and impact their ability to reinvest the money.
To reduce their tax liability, many individuals take advantage of Section 1031 of the Internal Revenue Code. This allows them to eliminate the capital gains tax by reinvesting earnings into a like-kind property. However, completing a successful exchange is challenging because of built-in restrictions, and a failed exchange means the investor must pay what they owe.
The experts at 1031 Exchange Intermediaries offer 1031 deferred exchanges that enable clients to sell their existing investment before identifying their replacement property. Our qualified intermediaries take pride in handling all elements of the process to ensure a successful exchange and reduce tax liabilities.