Capital gains tax on the sale of your investment property could run as high as 15% to 30% when state and federal taxes are combined. Why not take the necessary steps to avoid this loss? A big tax bite could wipe out money you need for further investments. With an IRC section 1031 exchange, the saying, “Nothing is certain but death and taxes,” is only half true for an informed taxpayer who is planning the sale of an investment or business property.
Depending upon the taxpayer’s situation, the type of property relinquished and the characteristics of the replacement property, other aspects of the 1031 exchange may be involved. Its completion may become complex and experts should always be consulted. This is not a task for a do-it-yourself investor.
Using the power of the 1031 exchange to build and preserve wealth and assets, generate cash flow from investments, restructure, diversify and consolidate real estate holdings is the right of every owner of investment property in the United States. American taxpayers should never have to pay capital gains taxes on the sale of their investment property if they intend to reinvest those proceeds in more investment property.
The 1031 Exchange can be a powerful wealth-building tool available to taxpayers. It has been part of the success strategy of financial advisors and real estate investors. Section 1031 of the Internal Revenue Code, the tax-deferred exchange, allows a taxpayer to sell income, investment, or business property and replace it with like-kind property. View 1031 replacement properties now.
*Capital gains tax on the sale of this property is deferred or postponed as long as the IRS rules are meticulously followed. This is a wise tax and investment strategy as well as an estate planning tool. In theory, an investor could continue deferring capital gains on investment property until death, potentially avoiding them altogether.
IREXA Financial Services / Wealth Strategies collaborates with CPAs, attorneys, and other tax planning professionals to assist clients with tax mitigation strategies. IREXA, Sandlapper Securities, and Sandlapper Wealth Management are not tax professionals or attorneys. IREXA only provides client tax mitigation strategies through, and with the approval of the client’s professional counsel. Read more about 1031 exchanges.