This tax move has made a lot of real-estate investors rich
As a real-estate investor, you may want to unload one property and replace it with another. But selling an appreciated property results in a current tax hit. This is a bad outcome if you intend to use the sales proceeds to buy replacement property. The good news: Section 1031 of the Internal Revenue Code allows you to postpone your tax bill by arranging for a deferred like-kind exchange. This time-honored maneuver is one big reason that some real-estate investors have struck it rich. However, there’s a risk that the like-exchange privilege could be sacrificed at the altar of tax reform. So it could be a good idea to get like-kind exchanges done sooner rather than later while the current taxpayer-payer friendly rules are still in place. Here’s what you need to know.
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