Dr. Friday reviews the core 1031 like-kind exchange rule for real estate investors. She explains how reinvesting proceeds can defer capital gains instead of paying tax immediately.
Transcript
G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.
1031 exchange rules for real estate have no big change. It’s what’s called a like-kind exchange.
A like-kind exchange basically means we can defer, that’s a good word, right, defer capital gains and buy something else.
The simplistic side of this is, let’s say you sell something for a million dollars and you’ve got a ton of capital gains in that, right? Maybe you originally paid 200, so you’d have like 800 grand of capital gains that you have to pay tax on.
Guess what? You go buy something else, or up to three other properties, for that million dollars, and you don’t have to pay tax right now.
You exchange it for one big property, maybe some other types of property. This is something that can work to save tax dollars. You need help? Go to drfriday.com.
You can catch the Dr. Friday Call-in Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.