Tax free sale exchange

[Joe Mayol]

Is there an alternative to doing a irs 1031

Exchange. Rolling to a alternative temporary. If replacing property can not be accomplished in time?

[Jim Pfeifer]

You could do a "Lazy 1031". When I sold all of my active investments, I had significant capital gains and I did not do a 1031 Exchange, or a QOZ or a DST. I talked to my accountant and he recommended the Lazy 1031. I invested in real estate syndications that do cost segregation and bonus depreciation. I invested the gains and some principal in multiple syndications. Each time I invest I got a paper loss of 50-110% of my investment amount. These losses took care of the gains from the sales of my active investments. The only timing issue you have is that is all has to be done in the same tax year.

This is not eliminating the tax generally, it is deferring the tax.  Upon sale of each syndication asset, I will have depreciation recapture.  Some of that will not be recaptured as it could have depreciated to zero, these are the very short term parts for the property.  There will be capital gains and recapture from the sale of the assets - and at that time I will invest in new syndications that offer depreciation benefits and that should offset those taxes.  I am taking a ride on the Golden Hamster Wheel.  It's much easier and less restrictive than the 1031 Exchange, but performs essentially the same thing - defer and reduce your taxes for as long as you can.  I am a full time passive investor and pay almost no tax.

The 100% bonus depreciation rule is being phased out over the next few years so the benefits might be reduced, but as long as you consistently invest in new deals when old ones sell, you can ride the Golden Hamster Wheel indefinitely.

Full disclosure, I am not a tax or financial advisor - this is just my experience.