Real Wealth Show: Real Estate Investing Podcast How to Use 1031 Exchanges to Build Wealth Through Real Estate
Apr 30, 2025
Discover the power of 1031 Exchanges for building wealth and deferring taxes in real estate. Learn the key rules and strict timelines you must follow to avoid pitfalls. Explore advanced strategies like Reverse Exchanges and their benefits. Delve into the essential process of identifying properties and strategic planning for successful outcomes. Plus, uncover how to maximize returns through geographic diversification and reinvesting in cash-rich markets!
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What Is a 1031 Exchange
- A 1031 exchange lets investors defer capital gains taxes by exchanging one investment property for another.
- It helps grow real estate portfolios and increase cash flow without immediate tax burdens.
Taxes Layered on Capital Gains
- Capital gains taxes involve layers including depreciation recapture, federal, state, and net investment income tax.
- Using a 1031 exchange can help investors reinvest full proceeds and defer these taxes.
Begin Replacement Search ASAP
- Start searching for replacement properties immediately after going under contract to meet strict 45-day identification and 180-day closing deadlines.
- Identify multiple options and vet them early to ensure smooth 1031 exchange compliance.
