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A 1031 Exchange Lets You Reinvest Without Paying Taxes Today · Military Real Estate Rookie Show

• 0:00
  SPEAKER_00: Hello, military real estate rookies.
• 0:02
  SPEAKER_00: This is your host, Rena, Rena Baron.
• 0:05
  SPEAKER_00: I want to discuss a topic that I don't know if all you guys know, but there's a way that you can sell your home without paying the taxes, the capital gains.
• 0:17
  SPEAKER_00: So it's called a 1031 Exchange.
• 0:20
  SPEAKER_00: And I want to dig a little bit into it.
• 0:23
  SPEAKER_00: So if you have any questions, you can DM me at Rena Baron Real Estate or you can contact me at renobaring real estate at gmail.com and I can get you to the professionals that would know more about it.
• 0:36
  SPEAKER_00: But I just wanted to touch on it just to get you guys educated on there is a way to sell your home for an exchange for a same value of a home.
• 0:46
  SPEAKER_00: So have you ever purchased an investments property, watched this value increase, and thought, I would love to sell it, but I don't want to get taxed with a huge bill.
• 0:55
  SPEAKER_00: Okay, well, guess what?
• 0:57
  SPEAKER_00: Maybe you own a rental home and you want to exchange it for a duplex.
• 1:01
  SPEAKER_00: Maybe you own a duplex and want to purchase a four-unit.
• 1:05
  SPEAKER_00: Or perhaps you've been investing for years and want to move from you know smaller property into larger income-producing properties, and that's okay.
• 1:13
  SPEAKER_00: But there's a tax strategy called 1031 exchange that may help you do just that.
• 1:20
  SPEAKER_00: Now, listen up, but let me make one thing clear: a 1031 exchange does not make your capital gains taxes disappear.
• 1:28
  SPEAKER_00: It generally allows you to defer the taxes when you exchange one investment property to another.
• 1:35
  SPEAKER_00: And there are rules, important rules.
• 1:37
  SPEAKER_00: Today I'm going to explain what a 1031 exchange is and how it works and who can use it, the timelines, the common mistakes, and how military families can potentially use this strategy to build additional wealth.
• 1:52
  SPEAKER_00: Now, let's get started.
• 1:53
  SPEAKER_00: What exactly is a 1031 exchange?
• 1:57
  SPEAKER_00: Well, since you asked, let's start with the basics.
• 2:00
  SPEAKER_00: Okay, so a 1031 exchange is just a name that gets from section 1031 of the Internal Revenue Code.
• 2:10
  SPEAKER_00: That's all it is.
• 2:12
  SPEAKER_00: This provision allows you qualifying real estate investors to sell certain investments or businesses, acquire other qualifying real property while deferring recognition of eligible capital gains and just deferring it, right?
• 2:27
  SPEAKER_00: In plain English, you sell a property, you take those proceeds and you put it on another investment property, you know, recognizing the eligible gain for federal income tax purposes, and people do it all the time.
• 2:40
  SPEAKER_00: So here's an example.
• 2:42
  SPEAKER_00: Okay, you ready?
• 2:44
  SPEAKER_00: Let's say you purchase an investment property for$150,000.
• 2:48
  SPEAKER_00: Over the years, the property increased its value.
• 2:51
  SPEAKER_00: Then you're able to sell it for$300,000.
• 2:55
  SPEAKER_00: You have a significant gain there.
• 2:57
  SPEAKER_00: And accounting for the selling expenses and depreciation and improvements and other tax adjustments, right?
• 3:04
  SPEAKER_00: You decide you want you don't want the cash, you just rather just and you don't want to pay the taxes right now, you rather just put it on something else, which is fine.
• 3:13
  SPEAKER_00: So you want to purchase another investment property, a property structured 1031 exchange may allow you to defer those property gain taxes, okay?
• 3:27
  SPEAKER_00: From the selling to a replacement property.
• 3:29
  SPEAKER_00: That's the basic idea.
• 3:31
  SPEAKER_00: You're just deferring, okay?
• 3:33
  SPEAKER_00: You're moving your investments from one property into another rather than simply selling it and taking the money.
• 3:39
  SPEAKER_00: Now, who can use these 1031 exchange ideas and businesses?
• 3:46
  SPEAKER_00: Guess what?
• 3:47
  SPEAKER_00: You can.
• 3:48
  SPEAKER_00: A 1031 exchange is not just for wealthy investors or large commercial real estate companies.
• 3:54
  SPEAKER_00: Like honestly, a normal person can use it.
• 3:58
  SPEAKER_00: You don't have to have a lot of wealth.
• 4:00
  SPEAKER_00: Individual investor may qualify.
• 4:02
  SPEAKER_00: Now, you might own a single family rental property, and you may own a duplex, or you can own a triplex or a four-unit or apartment building or commercial property or certain other qualifying and investment properties, you may qualify.
• 4:20
  SPEAKER_00: The key is that the property must be held for investment or productive use and trade of business.
• 4:28
  SPEAKER_00: So it must be not, it's not your primary home, it's an investment property.
• 4:32
  SPEAKER_00: For example, if you own a real home and want to exchange it for another rental property, that may qualify.
• 4:38
  SPEAKER_00: You can own a commercial property and want to exchange it for another apartment building that may also qualify.
• 4:45
  SPEAKER_00: But there's a major restriction.
• 4:48
  SPEAKER_00: You generally cannot use a 1031 exchange to sell your personal residence.
• 4:55
  SPEAKER_00: It doesn't work like that and buy another personal residence.
• 4:58
  SPEAKER_00: Sounds good, but no, it's not meant for that.
• 5:01
  SPEAKER_00: 1031 exchange is designed for qualifying investments and businesses, real estate, not ordinary personal home purchases.
• 5:09
  SPEAKER_00: So it has to be an investment property.
• 5:11
  SPEAKER_00: And remember, investment intent matter.
• 5:14
  SPEAKER_00: You cannot simply label your personal home and investment property to qualify.
• 5:19
  SPEAKER_00: Okay, so remember that.
• 5:21
  SPEAKER_00: Now, what properties can you exchange?
• 5:23
  SPEAKER_00: That's a good question, too.
• 5:24
  SPEAKER_00: Let's say you own a rental property and you want to sell it and purchase another rental property in Florida, but you have a rental property in Georgia.
• 5:32
  SPEAKER_00: Can you do that?
• 5:33
  SPEAKER_00: Potentially, yes, you definitely can.
• 5:36
  SPEAKER_00: The 1031 rule do not generally require the replacement property to be in the same state.
• 5:42
  SPEAKER_00: So you can go out of state and purchase another rental property.
• 5:47
  SPEAKER_00: I hope that makes sense.
• 5:48
  SPEAKER_00: And you could also exchange a single family home for a duplex or exchange a commercial property for an property for an apartment building.
• 5:57
  SPEAKER_00: Yeah.
• 5:58
  SPEAKER_00: The property do not have to be identical in size, type, or location.
• 6:02
  SPEAKER_00: Okay.
• 6:03
  SPEAKER_00: So however, they must meet the tax laws, like kind requirements.
• 6:09
  SPEAKER_00: Like kind requirements.
• 6:11
  SPEAKER_00: So, and here's something investors sometimes misunderstand.
• 6:14
  SPEAKER_00: Like kind does not mean the property must look alike.
• 6:18
  SPEAKER_00: Okay.
• 6:19
  SPEAKER_00: So just want to make sure you're clear on that.
• 6:21
  SPEAKER_00: For real estate, the definition is generally broad.
• 6:24
  SPEAKER_00: Investment real estate can often be exchanged for other qualifying US, you know, investment real estate.
• 6:31
  SPEAKER_00: But foreign real estate generally cannot be exchanged for U.S.
• 6:35
  SPEAKER_00: So remember that.
• 6:36
  SPEAKER_00: It generally they they do not like that.
• 6:39
  SPEAKER_00: So if you're selling an investment in Georgia and purchase an investment in Florida, they may work.
• 6:44
  SPEAKER_00: But if you're selling your US property and buying something overseas, they don't assume that qualifies.
• 6:50
  SPEAKER_00: But you just never know.
• 6:51
  SPEAKER_00: That's why it's good to ask the professional.
• 6:54
  SPEAKER_00: Okay.
• 6:55
  SPEAKER_00: And the two most important deadlines that you must meet is now we're getting the part where you absolutely cannot ignore.
• 7:03
  SPEAKER_00: You must identify a property.
• 7:06
  SPEAKER_00: And there's two major deadlines.
• 7:09
  SPEAKER_00: This is the 45-day identification period.
• 7:12
  SPEAKER_00: And this is after you transfer your original property, you generally have 45 days to identify a potential replacement property in writing.
• 7:22
  SPEAKER_00: That means you need to know what you're looking for already, like before you even decide to do it.
• 7:28
  SPEAKER_00: You cannot wait until the last minute to start thinking about where you want to invest.
• 7:31
  SPEAKER_00: You should have all this already laid out and where you want to invest.
• 7:35
  SPEAKER_00: You need to identify the replacement property or properties according to the RS definition of like kind.
• 7:43
  SPEAKER_00: The second deadline is the 180-day exchange period.
• 7:46
  SPEAKER_00: Generally, you must acquire the replacement property by the earlier of 100 days calendar days after transferring your, you know, your original uh property or the due date of your federal income taxes for the year of the transfer, including the extensions.
• 8:05
  SPEAKER_00: That's very important.
• 8:06
  SPEAKER_00: This is that that is very important, guys.
• 8:08
  SPEAKER_00: Don't get caught up in that.
• 8:10
  SPEAKER_00: The second part is important as well.
• 8:12
  SPEAKER_00: Depending on when you sell the property, your tax filing deadline could shorten the time available unless you maintain an extension.
• 8:20
  SPEAKER_00: So you need to make sure that you've already got your ducks in a row.
• 8:24
  SPEAKER_00: Let's use an example.
• 8:27
  SPEAKER_00: You sell your investment property on January 1st.
• 8:30
  SPEAKER_00: You generally have 45 days to identify a replacement property, right?
• 8:34
  SPEAKER_00: You generally have 180 days to complete the acquisition subject to the tax return deadline rule.
• 8:42
  SPEAKER_00: These deadlines are very strict.
• 8:44
  SPEAKER_00: So you need to know what you're doing.
• 8:46
  SPEAKER_00: And missing them can jeopardize the exchange.
• 8:50
  SPEAKER_00: So before you sell, make sure you have a qualified intermittent dairy.
• 8:54
  SPEAKER_00: I hope I'm saying it right, and a plan.
• 8:56
  SPEAKER_00: And we'll get into what that is, right?
• 8:59
  SPEAKER_00: That is someone that is going to be the middle person to make sure that all this is happening.
• 9:05
  SPEAKER_00: And what is qualified for this?
• 9:07
  SPEAKER_00: Let's talk about the person or the company that makes this transaction work.
• 9:12
  SPEAKER_00: This is sort of kind of like a middle person, a transaction coordinator, kind of, but they must be qualified, often called a QI.
• 9:19
  SPEAKER_00: It's a third party who facilitates the exchange.
• 9:22
  SPEAKER_00: That's all it is.
• 9:23
  SPEAKER_00: Why do you need one?
• 9:25
  SPEAKER_00: Because in a typical deferred 1031 exchange, you cannot receive or control the sales proceeds yourself.
• 9:33
  SPEAKER_00: The qualified individual helps hold the exchange fund and coordinate the trans the transfer of funds towards the replacement property.
• 9:42
  SPEAKER_00: Here's an important point.
• 9:44
  SPEAKER_00: You generally need to establish the exchange arrangement before closing on the sale of the original investment property.
• 9:50
  SPEAKER_00: Okay, so like I said, you need to have your ducks in a row, reach out to them.
• 9:55
  SPEAKER_00: And there's plenty of websites, and I'll give you some in an interview.
• 9:59
  SPEAKER_00: Do not close on your property, receive the money, and then decide after you want to do a 1031 exchange.
• 10:03
  SPEAKER_00: Doesn't work like that.
• 10:05
  SPEAKER_00: That can be too late.
• 10:06
  SPEAKER_00: So also, not everyone can serve as a qualified individual that makes that exchange.
• 10:12
  SPEAKER_00: Certain relationships and parties, people who act as your agent within the two-year period are disqualified, subject to exceptions.
• 10:20
  SPEAKER_00: Work with an experienced QI and tax professional before closing.
• 10:25
  SPEAKER_00: Now, the next thing is do you have to buy a more expensive property?
• 10:29
  SPEAKER_00: Again, here's another question I hear investors ask: Do I have to purchase a property that costs more than the one I sold?
• 10:37
  SPEAKER_00: The answer depends on how much gain and debt you want to defer.
• 10:41
  SPEAKER_00: As a general rule, to fully defer gain in a typical exchange, investors generally aim at purchase replacement property with equal or greater value and reinvest all the net proceeds into that property, the exchange property.
• 10:59
  SPEAKER_00: All replace the debt paid off there, replace the debt paid off on the relinquished property with equal or greater debt, or contribute additional cash to make up the dish difference.
• 11:11
  SPEAKER_00: That is very key.
• 11:12
  SPEAKER_00: There are details and exceptions, so don't treat this as a one-size fit-all.
• 11:17
  SPEAKER_00: Let's look at an example.
• 11:18
  SPEAKER_00: You sell an investment property for$300,000.
• 11:21
  SPEAKER_00: You have$250,000 in net proceeds after selling expenses and debt payoff.
• 11:28
  SPEAKER_00: Okay.
• 11:29
  SPEAKER_00: You purchase another qualified investment for$350,000.
• 11:34
  SPEAKER_00: You reinvest the exchange proceed and finance the balance.
• 11:39
  SPEAKER_00: Depending on the full transaction, taxes, basis, debt, and other facts, this may support full deferral.
• 11:47
  SPEAKER_00: So you're good.
• 11:48
  SPEAKER_00: But what if you sell a property and only purchase a replacement property for$200,000?
• 11:55
  SPEAKER_00: You may receive some taxable proceeds or other value in the transaction.
• 12:00
  SPEAKER_00: That is common, referring to as receiving boot.
• 12:05
  SPEAKER_00: Boot can create taxable gains up to recognized gains.
• 12:11
  SPEAKER_00: So the goal is not simply to buy another property.
• 12:15
  SPEAKER_00: You need to structure the transaction correctly.
• 12:19
  SPEAKER_00: Okay.
• 12:20
  SPEAKER_00: So what is boot?
• 12:21
  SPEAKER_00: I know you guys were gonna get to that.
• 12:23
  SPEAKER_00: Okay, so let me get to that.
• 12:24
  SPEAKER_00: Let's slow down for a minute because this term is very important.
• 12:27
  SPEAKER_00: Okay.
• 12:28
  SPEAKER_00: In a 1031 exchange, boot generally refers to the money or other non-like kind property receiving exchange that may trigger taxable gain.
• 12:39
  SPEAKER_00: For example, you sell a qualifying investment property and have$100,000 in net exchange proceeds, you decide to use the$80,000 toward the replacement property and receive the remaining$20,000.
• 12:54
  SPEAKER_00: The$20,000 may be taxable subject to amount of realized gain and rules.
• 13:00
  SPEAKER_00: There are also debt-related considerations as well.
• 13:05
  SPEAKER_00: If you pay off a mortgage on your original property and acquire replacement property with less debt, that deduction reduction can be treated as a boot unless offset by additional cash or other qualifying considerations.
• 13:21
  SPEAKER_00: The lesson here, guys, my real military real estate rookies, do not focus only on the purchase price.
• 13:30
  SPEAKER_00: Look at the entire transaction that includes the sales price, the debt, the exchange proceeds, the expenses, and the tax basis.
• 13:39
  SPEAKER_00: That's why you need that qualifying individual.
• 13:42
  SPEAKER_00: Okay.
• 13:43
  SPEAKER_00: The next question is can you exchange rent rural property for a multifamily property?
• 13:48
  SPEAKER_00: That is a very good question.
• 13:50
  SPEAKER_00: Now, this is where things get interesting for investors who want to grow their portfolios.
• 13:55
  SPEAKER_00: Okay, so let's say you own a single-family home and a single-family rental home, and it has appreciation over the years.
• 14:04
  SPEAKER_00: You're tired of managing one property and want to purchase a duplex or four unit.
• 14:09
  SPEAKER_00: That sounds really good.
• 14:11
  SPEAKER_00: Okay, can you exchange your single-family rental for a multifamily real estate?
• 14:15
  SPEAKER_00: Potentially, yes.
• 14:17
  SPEAKER_00: I'm not gonna give you a full yes, but potentially a qualified single-family rental property can generally be exchanged for a qualified multifamily investment property.
• 14:28
  SPEAKER_00: Yeah.
• 14:30
  SPEAKER_00: And that creates opportunity.
• 14:32
  SPEAKER_00: You know, you might exchange it.
• 14:35
  SPEAKER_00: Want to rental a house for a duplex, a duplex for a four fourplex, you know, a small apartment building for a larger apartment apartment building, you know, commercial property for qualifying real estate.
• 14:50
  SPEAKER_00: That is something that you potentially may exchange it for.
• 14:55
  SPEAKER_00: You're not required to buy the exact same type of property.
• 14:59
  SPEAKER_00: I hope that makes sense.
• 15:01
  SPEAKER_00: I hope it's clear.
• 15:02
  SPEAKER_00: However, the replacement property must meet the rules, investment use and like kind requirements.
• 15:09
  SPEAKER_00: And you need to make sure the numbers work.
• 15:12
  SPEAKER_00: Just because a property qualifies for a 1031 exchange does not mean it's a good investment.
• 15:19
  SPEAKER_00: So you need to do your homework.
• 15:21
  SPEAKER_00: Okay?
• 15:21
  SPEAKER_00: I'm talking about maybe a year out, maybe six months.
• 15:26
  SPEAKER_00: You still need to evaluate rental income, expenses, vacancy rate, insurance, taxes, maintenance, and financing.
• 15:34
  SPEAKER_00: A tax strategy should never replace good investment analysis.
• 15:38
  SPEAKER_00: So, what about our military families that we hope make the right decision and is fully educated on this process?
• 15:46
  SPEAKER_00: So let's get this conversation started.
• 15:48
  SPEAKER_00: Okay, the military family moves.
• 15:50
  SPEAKER_00: Of course, we know that we move all the time.
• 15:52
  SPEAKER_00: And sometimes you purchase a home at one duty station, receive orders, and decide to rent out the property instead of selling it.
• 15:57
  SPEAKER_00: Sounds great.
• 15:58
  SPEAKER_00: Good.
• 15:59
  SPEAKER_00: Over time, that property may become an investment.
• 16:02
  SPEAKER_00: You may eventually decide to sell it and purchase another investment property.
• 16:07
  SPEAKER_00: Could a 1031 exchange be an option?
• 16:10
  SPEAKER_00: Potentially, yeah.
• 16:12
  SPEAKER_00: If the property has been converted to and held for investment use and transaction meet the tax requirement, but this is where the timing and documentation matter, my military real estate recogies.
• 16:24
  SPEAKER_00: If you originally purchased a home as your personal residence, then later move and convert it into a rental, you need to establish that fact surrounding it investment use.
• 16:36
  SPEAKER_00: Believe your taxes use need to show that, right?
• 16:39
  SPEAKER_00: There's no automatic rule that says a property becomes eligible simply because you move out and put a tent in it.
• 16:45
  SPEAKER_00: You need a documentation.
• 16:47
  SPEAKER_00: The RS has guidance involving dwelling units, investment intent, including safe harbor, rules for certain vacation and rental properties.
• 16:55
  SPEAKER_00: A tax professional familiar with section 1031 exchange can help evaluate your situation.
• 17:01
  SPEAKER_00: So you need to get with a very good tax professional to help you with this.
• 17:06
  SPEAKER_00: And don't confuse a 1031 exchange with a separate tax rule that may apply to the sale of a primary resident under section 121.
• 17:14
  SPEAKER_00: It's different.
• 17:15
  SPEAKER_00: There are different provisions with different requirements.
• 17:18
  SPEAKER_00: And military families should always remember that PCS MOOC does not automatically create a 1031 exchange opportunity.
• 17:25
  SPEAKER_00: You must qualify under the tax rule.
• 17:29
  SPEAKER_00: So I hope that makes you understand about that.
• 17:32
  SPEAKER_00: Okay.
• 17:33
  SPEAKER_00: So here's some common mistakes about the 1031 exchange mistakes that I thought that it may be helpful for you guys.
• 17:41
  SPEAKER_00: Okay.
• 17:42
  SPEAKER_00: Mistake number one, waiting until after closing to consider a 1031 exchange.
• 17:47
  SPEAKER_00: You're at the table closing and you say, you know, I could have done the 1031 exchange.
• 17:51
  SPEAKER_00: You generally need to arrange this before closing on the original property, right?
• 17:55
  SPEAKER_00: Don't wait to that last minute.
• 17:57
  SPEAKER_00: Mistake number two, missing the 45-day identification deadline.
• 18:01
  SPEAKER_00: It's very important to identify where you want to put this money at.
• 18:06
  SPEAKER_00: And you need identified replacement property within that time frame.
• 18:09
  SPEAKER_00: Mistake number three, missing the 180-day exchange deadline.
• 18:14
  SPEAKER_00: Okay, you must complete the acquisition within that time period.
• 18:18
  SPEAKER_00: Okay, so and then mistake number four, take possession of the exchange proceeds.
• 18:24
  SPEAKER_00: Taking possession of the exchange proceeds, that means that everything is good.
• 18:28
  SPEAKER_00: You got the exchange proceeds and you're giving it to the other party.
• 18:33
  SPEAKER_00: That is why the qualified intermediate area is so important.
• 18:38
  SPEAKER_00: The QI.
• 18:40
  SPEAKER_00: Mistake number five, buying a personal resident instead of qualifying investment property.
• 18:45
  SPEAKER_00: We talked about that.
• 18:46
  SPEAKER_00: A 1031 Exchange is not a general tax-free house swapping program.
• 18:51
  SPEAKER_00: You must meet the tax requirements.
• 18:54
  SPEAKER_00: And forgetting about depreciation is number six.
• 18:58
  SPEAKER_00: Rental properties may have depreciation deductions over years.
• 19:02
  SPEAKER_00: And when you sell depreciation, recapture, and other tax consequences can come into play.
• 19:07
  SPEAKER_00: So 1031 exchanges can be good and it can be, if it's the best fit, hey, do it.
• 19:14
  SPEAKER_00: If not, then you got to look at some other requirements, some other options.
• 19:18
  SPEAKER_00: You know, so mistake number seven is focusing on the taxes, only on the taxes.
• 19:24
  SPEAKER_00: What is the best fit for you?
• 19:26
  SPEAKER_00: A bad investment is still a bad investment, even if you defer the taxes.
• 19:31
  SPEAKER_00: Is it going to work for you?
• 19:33
  SPEAKER_00: Does it make sense?
• 19:34
  SPEAKER_00: Always evaluate the replacement property financial performances.
• 19:37
  SPEAKER_00: Don't get into a bad investment.
• 19:40
  SPEAKER_00: And does a 1031 exchange eliminate taxes forever?
• 19:44
  SPEAKER_00: This is probably one of the biggest misconceptions.
• 19:46
  SPEAKER_00: A 1031 exchange generally refers eligible gain.
• 19:50
  SPEAKER_00: It does not automatically eliminate the taxes forever.
• 19:55
  SPEAKER_00: The deferred gain generally carries on the basis of replacement property.
• 19:59
  SPEAKER_00: So it's only deferred.
• 20:01
  SPEAKER_00: So that means if you sell the property, the replacement property later without another qualifying exchange, you may have taxable gains.
• 20:09
  SPEAKER_00: That's how that works.
• 20:10
  SPEAKER_00: Some investors continue exchanging property over time, you know, flip-flopping, you know.
• 20:15
  SPEAKER_00: So you may hear people refer to as this as building wealth through repeated 1031 exchanges.
• 20:20
  SPEAKER_00: But does it work for you?
• 20:22
  SPEAKER_00: Or is this what you consider, you know?
• 20:25
  SPEAKER_00: So, but every exchange must meet the requirements.
• 20:28
  SPEAKER_00: So you need to make sure that you understand is it's going to be a good fit for you.
• 20:32
  SPEAKER_00: There's also a separate estate planning issue, too.
• 20:35
  SPEAKER_00: Under current federal laws, inherited property may see a basis adjustment subject to rules and regulations.
• 20:42
  SPEAKER_00: You need to read up on that.
• 20:44
  SPEAKER_00: This is why investors sometimes discuss holding appreciated real estate for life and leaving it to their heirs.
• 20:50
  SPEAKER_00: Maybe a good option for you.
• 20:53
  SPEAKER_00: But estate planning is complicated and tax rules can change.
• 20:56
  SPEAKER_00: But don't assume a future basis is guaranteed in every situation.
• 21:00
  SPEAKER_00: Every situation is different.
• 21:04
  SPEAKER_00: So is a 1031 exchange right for you?
• 21:07
  SPEAKER_00: That is something that you got to decide.
• 21:10
  SPEAKER_00: You have to decide that.
• 21:12
  SPEAKER_00: But here are some things that I want you to explore.
• 21:15
  SPEAKER_00: You own qualifying investment real estate.
• 21:18
  SPEAKER_00: A 1031 exchange may be worth exploring.
• 21:22
  SPEAKER_00: You your property has appreciated.
• 21:25
  SPEAKER_00: Good for you.
• 21:26
  SPEAKER_00: And you want to invest rather than cash out.
• 21:29
  SPEAKER_00: And you want to move into a larger property.
• 21:33
  SPEAKER_00: You want to change exchange into a different type of qualifying real estate.
• 21:37
  SPEAKER_00: You understand the deadlines and requirements.
• 21:40
  SPEAKER_00: You have a qualified person, a tax professional to give you guidance on that 1031 exchange.
• 21:47
  SPEAKER_00: But it may not be the best choice if you need the cash.
• 21:51
  SPEAKER_00: Want to purchase a personal residence or cannot find a suitable replacement property.
• 21:57
  SPEAKER_00: Sometimes selling and paying the taxes may make more financial sense.
• 22:01
  SPEAKER_00: You get the cash, you pay your bills.
• 22:04
  SPEAKER_00: The goal is not to avoid every tax at all costs.
• 22:08
  SPEAKER_00: The goal is to make informed decisions that support your long-term goals.
• 22:13
  SPEAKER_00: In closing, I think that listeners will understand this.
• 22:18
  SPEAKER_00: You got to think like an investor when you're dealing with a 1031 exchange.
• 22:23
  SPEAKER_00: Okay.
• 22:24
  SPEAKER_00: So, all right, everybody, I hope that brings some educational to the 1031 exchange.
• 22:30
  SPEAKER_00: I know this word always comes up.
• 22:32
  SPEAKER_00: It's a powerful tool for real estate investors who want to sell one qualifying investment property for another and defer the capital gains.
• 22:41
  SPEAKER_00: But but remember the three things I want you to take away from today.
• 22:45
  SPEAKER_00: Number one, plan before you sell.
• 22:48
  SPEAKER_00: Know where you're going, where you're going to land, where you want to go.
• 22:52
  SPEAKER_00: And number two is know your 45-day and 180-day deadline.
• 22:56
  SPEAKER_00: And number three is work with a qualified person tax professional who understands 1031 exchange.
• 23:02
  SPEAKER_00: And most importantly, don't buy a property just because you're trying to avoid taxes.
• 23:08
  SPEAKER_00: Buy property that makes financial sense for you and your family.
• 23:13
  SPEAKER_00: If you enjoyed today's episode, please follow or subscribe to the Military Real Estate Rookie Show.
• 23:18
  SPEAKER_00: Leave a review, share this episode, and send it to another real estate investor who needs to understand the strategy.
• 23:25
  SPEAKER_00: If you're looking to buy or sell or invest in real estate in Georgia or Florida, I'd love to help you.
• 23:32
  SPEAKER_00: Just for those options.
• 23:34
  SPEAKER_00: If you're not, I still love to help you, you know, because I can connect you with other real estate professionals.
• 23:41
  SPEAKER_00: Follow me on Instagram at Rena Baron Real Estate, or you can contact me at Renobaron Realestate at gmail.com.
• 23:48
  SPEAKER_00: And I work with buyers and sellers all over the place.
• 23:51
  SPEAKER_00: I can help you connect with real estate professionals throughout the United States.
• 23:56
  SPEAKER_00: Until next time, remember real Rena State.
• 23:59
  SPEAKER_00: Real estate is more than buying and selling homes.
• 24:02
  SPEAKER_00: It's about understanding your options, building wealth, and making your investment work for you.
• 24:08
  SPEAKER_00: Arena Barron and this is Military Real Estate Rookie Show.
• 24:12
  SPEAKER_00: And guys, thanks for listening and thanks for supporting my podcast.
• 24:17
  SPEAKER_00: And I appreciate it.
• 24:18
  SPEAKER_00: And I hope this helped you.
• 24:20
  SPEAKER_00: You have a good night.
• 24:22
  unknown: Bye.