Avoiding Capital Gains Tax

Real Estate Agent with Keller Williams Realty

Avoiding Capital Gains Tax

As the year comes to an end I am getting a lot of inquiries regarding avoiding Capital Gains Tax. Obviously one would want to consult with an attorney on the subject, however in the next couple of days I will be re-publishing some factual and verified data.

The Legal and Savvy Tax Loophole for Avoiding Capital Gains Tax

No investor likes to pay unnecessary capital gains taxes. But no savvy investor wants to be caught avoiding capital gains tax. So, any seasoned real estate investor is familiar with IRS § 1031 and knows how to avoid capital gains tax legally. 1031 Exchanges allows investors to defer paying capital gains and depreciation recapture taxes by allowing them to reinvest 100% of the proceeds from their sale of investment properties into a like-kind or greater value property.

How to Avoid Capital Gains Tax?

The key to avoiding capital gains tax is education. A real investor must know all of the requirements of how to avoid capital gains tax; otherwise they could be stuck in a tenuous battle with the IRS over capital gains taxes and other penalties. The following are the basic information an investor needs to know as they are avoiding capital gains tax during their real estate investment property transactions.

  • Start Early: The time requirements are absolute. It is worthwhile to start identifying potential properties, as you are about to enter the escrow process on the relinquished property.
  • Freedom from the headaches of Property Management: As a real investor you a familiar with the high cost of ownership: management. Whether you hire a property management firm or individual manager, you still have to deal with the -frustrating headaches of owning investment property. A 1031 TIC Exchange allows you to bypass this frustrating aspect of ownership while still reaping all of the financial benefits of investment property ownership.
  • Flexibility and Pre-Arranged financing: The 1031 TIC Exchange offers a diverse array of financing structures that are flexible and adaptable to different investment strategies.

The IRS tax code is a dense and ever-changing code that is constantly being re-articulated in court opinions, IRS rulings and amendments so you need a Tenant in Common 1031 Exchange expert who is well-versed in IRS tax code and able to guide through the complicated nature of a Special Purpose Entity that underlies the 1031 TIC transaction.

See www.clearleadinc.com for additional information.


Comments (2)

Don Eichler
Eichler Properties - Granbury, TX

Brian, Very good advice to any investor.

Jan 03, 2010 12:33 PM
Ricardo Mello
Manhattan Miami Real Estate - Manhattan, NY
Manhattan & Miami Real Estate Agent

Great piece Brian  


We also wrote a recent article talking about CGT: "How Capital Gains Tax Can Be Reduced or Deferred When Selling Property" 

Jan 16, 2019 05:17 PM