You pay income tax on your profit when selling correct?

[Michael Plante]

Ok I THOUGHT I knew about these things after buying and selling real estate for many years 

BUT am always eager to learn 

except when doing a 1031 exchange you need to pay income tax on profit when you sell a property correct?

To me these seems like a straightforward definite YES!

BUT I’m the past 2 weeks I’ve spoken with 2 other real estate investors who SWEAR they just put the profits into other property and don’t pay any income tax !?!?

Seems Crazy to me 

yes yes I know ask an accountant.  Which I will.  But wanted to get feedback here 

[Dave Foster]

@Michael Plante, It's the IRS.  Nothings straightforward.  There's a few ways.

1. Lose money in other ventures so your profit is offset with loss

2. Invest in an opportunity zone 

3. Use a tool like a charitable remainder trust, deferred sales trust, installment sale

To name a few.

But my guess would be that those folk your talking to who "just put their profits into the next purchase" are using the tool of GTA (Good till audit).

That's a risky place to be.  As Jay Leno said, avoid audit triggers at all costs - Like when you have money in the bank after paying taxes.  That's an audit trigger!!