1031 exchange lets you sell real estate and reinvest the full sale amount into another property without paying taxes immediately on the gains.
Unlike stocks, where selling triggers tax on gains right away, real estate 1031 exchanges defer those taxes if done properly.
You have 90 days after selling to identify potential replacement properties, and 180 days to complete the purchase.
Missing these deadlines means you’d owe taxes on the gains from the sale, losing the tax-deferral benefit.
Using 1031 exchanges can save a lot of money over time by deferring taxes and increasing investment potential.
Some investors skip 1031 exchanges, paying taxes on each sale, which might cost them tens of thousands in taxes they could avoid by using this strategy.
