Get Rich Education 143: Your 1031 Exchange Guide: Tax-Deferral For Life
#143: You’re entitled to a great gift from the IRS - lifetime tax-deferral so that you never have to pay capital gains tax on the sale of your investment real estate.
With a 1031 Tax-Deferred Exchange, you can infinitely defer your: federal capital gains tax, state capital gains tax, and depreciation recapture.
From the sale of your property, you have 45 days to identify, and 180 days to close upon your replacement property. Details in-episode.
1031s are only for investment property. They’re amazing wealth-building tools, but you must follow strict rules.
Graham Parham of Highlands Residential Mortgage joins Keith later in the show to discuss lending obstacles with 1031 Exchanges.
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Listen to this week’s show and learn:
02:12 Normally, upon the sale of income property, one must pay federal capital gains tax, state capital gains tax, and depreciation recapture.
03:29 1031 Exchanges vs. cash-out refinances. Reasons for doing a 1031.
06:35 Three identification methods: 3 Properties Rule, 200% Rule, 95% Rule.
09:40 Like-Kind Exchanges are flexible between income property types.
12:18 A technique to use a 1031 and still get your hands on the cash.
14:12 Primary residences have capital gains tax exemptions outside of 1031s.
18:29 Lending obstacles with 1031s.
22:38 1031 Example - sell 2 in Dallas, exchange for 4 in Birmingham.
25:32 Greater leverage.
31:06 Combining multiple properties into one exchange.
34:11 Simultaneous closings. Advantage of 1031s with turnkey property.
35:40 You can do an unlimited amount of exchanges in your lifetime.
37:22 1031s are amazing wealth-building tools, but you must carefully follow rules.
Resources Mentioned:
Graham Parham phone: (855) 326-6802