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Rental Property Sale - How To Defer Taxes



If you own one rental or ten rentals, this is for you.


If you're thinking about selling one or more of your rental properties, and have plans to take the profits and invest them into a new deal, you may want to consider doing a 1031 exchange.


A 1031 allows you to sell your property and roll those proceeds into a new deal without having to pay tax on the profits from that sale.


Instead, the tax is deferred allowing you to keep more money from the sale to help with the new down payment on the replacement property.


The tax is deferred until you eventually sell your property and actually take home the proceeds (once you actually touch the cash). But until then you can continue to do 1031's and keep rolling those proceeds into bigger and better deals.


This is one of the most used strategies for real estate investors to continue to build wealth, increase cash flow and defer paying taxes.


Keep in mind of the below, these are the main rules of a 1031:


- to defer 100% tax, the replacement property has to be of equal or greater value than the one being sold

- it has to be a like kind exchange

- replacement property must be identified within 45 days

- replacement property must be purchased within 180 days


Hope this helps. If you have questions, let me know.

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