What is the real point of doing a 1031 exchange anyway? - Simplest explanation

[Mike Auerbach]

What is the point of doing a 1031 exchange? Here is the how I would explain it to a kindergartner:

The true power of a 1031 exchange is the ability for an investor to meet their investment objectives without losing equity to taxation.

With more money they can buy larger, multiple, or more productive properties.

What is the alternative? Paying 30-40% in taxes when they sell

#1031exchange #equity #capitalgains #taxes #deals #like-kindexchange

[Michael Doherty]

I've done a few 1031 exchanges, they are a valuable tool! Ensure you work with a team that is familiar with them (accountants / lawyers).

A 1031 exchange is a way for real estate investors to defer paying taxes on the sale of investment property. Essentially, instead of selling a property and paying taxes on the capital gains, you can reinvest the proceeds into a similar property and defer the taxes. This allows you to keep more money working for you in the real estate market, potentially helping you grow your investment portfolio faster.