Real Estate Strategies

When a 1031 Exchange May Not Actually Save On Tax

The 1031 Like-Kind Exchange (LKE) provides a great potential benefit to taxpayers who want to sell rental properties to purchase others in the United States.
IRC § 1031 allows you to defer a taxable gain that would normally be taxed at the time of sale of a rental property. However, there are situations when a 1031 exchange may not be the best option for the taxpayer, and it could potentially dilute the tax savings when compared to a traditional sale or other gain minimization strategies.
To take advantage of the tax deferral benefits of a 1031 exchange, you’ll need to follow a specific set of guidelines. Here, we will dive into the circumstances that you should review to determine if a 1031 exchange will be the best option in mitigating the taxes you owe.

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CURRENT EDITION

OBBBA Rundown: Provisions Affecting Individuals for 2025

Thomas Gorczynski, EA USTCP CTP

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OBBBA Rundown: Provisions Affecting Businesses for 2025

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