1031 Exchange, Is it worth it?

[Chris Thompson]

I currently have a rental property for sale. I spoke to my accountant about doing a 1031 exchange. His advice was pretty simple. I can pay the known tax rate of 15% today or hope that the tax rate doesn't increase and pay the taxes somewhere down the line. I compare this to a Traditional IRA vs. a Roth IRA. My accountant advised that I pay the taxes now and skip the 1031 exchange because taxes will most likely be higher in the future and will almost certainly not be lower. Looking for other opinions on this.

[Dave Foster]

@Chris Thompson, Some peoples Kids!! Ask that accountant if he has a retirement account - an IRA or a 401K. He must be planning on liquidating it soon so he can pay today's tax instead of the tax in the scary future.

If your gain doesn't justify the cost.  If you can't find new replacement real estate.  If you want to stop investing in real estate.  If you need to pay for a new kidney....These are legitimate reasons to sell and pay the tax.

Tell him to stick to filing out 1040s.  He's not much of a financial advisor!