There are many benefits offered by a 1031 exchange of real estate. Here we are going to offer three reasons why you should consider conducting a 1031 exchange in North Dakota.
Save Money in Capital Gains Taxes
Perhaps the greatest benefit of a 1031 exchange is that it is a vehicle through which you can defer your capital gains taxes when selling real estate. In a typical real estate sale, you are responsible for paying capital gains taxes on the sale of your property. This can be a substantial sum. A 1031 exchange, when done correctly, allows you to defer 100% of these capital gains taxes as long as you reinvest your net proceeds into a replacement property – thus keeping your money working for you over time instead of paying it out in taxes.
Diversify Your Portfolio
1031 exchanges also offer a great opportunity to diversify your portfolio. With a 1031 exchange, you can exchange out of and into any segments of the real estate market – provided you abide by the 1031 exchange rules and regulations.
Exchange Out of Management-Intensive Property
You can also utilize a 1031 exchange to get out of a management-intensive property such as an apartment building. Many taxpayers who are looking to retire and do not want to do the work required of management-intensive properties might find this opportunity attractive.
1031 Exchanges of Real Estate
A 1031 exchange can help you defer capital gains taxes when selling real estate. But in order to do so, you need to follow some strict guidelines. Working with a qualified intermediary through this process is the best way to ensure the success of your exchange. The intermediaries at CPEC1031 have over two decades of experience. Reach out to our intermediaries today to learn more about the like-kind exchange process, its benefits, and how we can help you through the details of your exchange.