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Investment Gains/Income and high yield savings account (HYSA)
Does anybody know if investment gains from an house flip is stilled taxed if put into a HYSA (high yield savings account)?
Can a HYSA work the same as doing 1032 Exchange?
No. A 1031 exchange must be into like-kind investment. So if you are selling rental property then you must buy rental proeperty.
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@Adam Rivera, the 1031 has to be a sale of investment real estate followed by a purchase of investment real estate. It can be any type of real estate including something that might not be a "rental" so to speak. Think like raw land in the path of progress. Or the building you run your restaurant out of. But it does have to be investment real estate.
There is an allure in the thought of taking money out of real estate and placing it in "safer" investments. But if you can adjust your debt situation that relieves most of the risk of owning real estate. While still allowing you to reap all of the benefits of real estate ownership including not just a return, but also capital appreciation, depreciation, and amortization of the loan (if you have one).
This kind of transition is exactly what 1031 exchanges are designed for.