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Selling US Real Estate Property and using a 1031 exchange to save US capital Gains Tax

March 26, 2024

Using a 1031 exchange offers several benefits, including deferring capital gains taxes on the sale of real estate, allowing investors to reinvest proceeds into like-kind properties without immediate tax consequences, and facilitating portfolio diversification and growth. To qualify, properties involved in the exchange must be held for business or investment purposes, the replacement property must be of like-kind and of equal or greater value, and strict timing rules must be followed, with identification of replacement properties within 45 days and completion of the exchange within 180 days. Additionally, the use of a qualified intermediary is required to facilitate the exchange and ensure compliance with IRS regulations.

Using a 1031 exchange offers several benefits, including deferring capital gains taxes on the sale of real estate, allowing investors to reinvest proceeds into like-kind properties without immediate tax consequences, and facilitating portfolio diversification and growth. To qualify, properties involved in the exchange must be held for business or investment purposes, the replacement property must be of like-kind and of equal or greater value, and strict timing rules must be followed, with identification of replacement properties within 45 days and completion of the exchange within 180 days. Additionally, the use of a qualified intermediary is required to facilitate the exchange and ensure compliance with IRS regulations.

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