Sep 1, 2023
Grant Murphy
Castling Tax, a qualified 1031 intermediary, brings you a savvy investment strategy to maximize your real estate investments: Reverse 1031 Exchanges. This unique method allows you to buy property before selling, all while deferring taxes.
What are Reverse 1031 Exchanges?
In a traditional 1031 exchange, you sell your property first and then buy a like-kind property. However, in a Reverse 1031 Exchange, the order is reversed. You purchase your replacement property first and then sell your current property.
Benefits of Reverse 1031 Exchanges
Flexibility: Reverse 1031 exchanges provide flexibility in terms of time. You can secure a desirable property even if you haven't found a buyer for your current property.
Tax Deferral: Similar to a traditional 1031 exchange, a reverse exchange allows you to defer capital gains tax.
Investment Growth: By reinvesting the proceeds from the sale into another property, you can grow your property portfolio.
How do Reverse 1031 Exchanges work?
During a Reverse 1031 Exchange, an Exchange Accommodation Titleholder (EAT) holds the title of the replacement property until you sell your current property. Once the current property is sold, the title of the replacement property is transferred to you.
Important Considerations
While Reverse 1031 Exchanges offer numerous benefits, there are important rules to consider. The IRS requires that the exchange be completed within 180 days. Additionally, the property being sold and the replacement property must be of like-kind.
Maximize Your Real Estate Investments with Castling Tax
Whether you're a seasoned investor or new to the real estate game, Castling Tax can help you navigate the complex world of 1031 exchanges. Our team of experts will guide you through every step of the process, ensuring a smooth and successful exchange.
To calculate potential capital gains from a 1031 exchange, use our free 1031 exchange capital gains calculator.
If you have any questions or are ready to start your Reverse 1031 Exchange, contact us today. Boost your property portfolio and defer taxes with Castling Tax.