How Can a 1031 Exchange Benefit Me?

The main benefit of a 1031 Exchange is the deferral of taxes. The tax that otherwise would have been paid gets reinvested as equity into the new property, a wealth building technique.

Other benefits include:

• Greater leverage capability to buy more property.
• Change, consolidate or diversify your investments by asset class or geographic location.
• Improve cash flow, for example exchanging from bare land into income producing property.
• Replace fully depreciated assets into new property to restore basis and future depreciation expense.
• Elimination of day to day management obligations.
• Incorporate estate planning strategies with family members by balancing estate values among them.
• Under a new IRS ruling and proper 1031 planning, you can even exchange into a property that can one day be your principal residence, and eliminate the tax entirely.