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Tax Free 1031 Exchange Explained

Internal Revenue Code provides that no gain or loss will be recognized on the exchange of any type of business use or investment rental property for any other business use or investment rental property. This means that a tax free 1031 exchange is a rollover of equity of like rental properties, rather than an avoidance of tax and allows for the transaction to take place with full tax benefits attached. Performing a tax free 1031 exchange allows property owners to use all of the proceeds from the initial sale of rental property. Many property owners use such exchanges as leverage for entering more lucrative rental property deals, which in turn increases their cash flow and diversifies their investment portfolios while at the same time consolidating their investments into one rental property.

If you recently sold an investment rental property or you're considering selling, we can match you with a tax free 1031 expert able to help you explore your tax free 1031 exchange options.