4 real estate investors explain how they're capitalizing on an IRS rule to avoid capital gains tax and scale their portfolios
Business
When you sell a property for more than you purchased it, you'll typically owe capital gains tax. The amount depends on factors like how long you owned the property and your taxable income, but it could be as high as 37% if you sell within a year and trigger short-term capital gains. However, IRC Section 1031 provides an exception, allowing investors to postpone paying tax on the gain if they reinvest the proceeds in similar property. Commonly known as a 1031 exchange, investors use the strategy
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