Cashing Our Real Estate Profits with Section 1031

Paying taxes on the sale of your real estate is voluntary. You do not need to volunteer.

While growing your real estate portfolio, you may have used Internal Revenue Section 1031 to avoid taxes when acquiring bigger and better properties. But now, when you want to cash out, Section 1031 may not be the vehicle of choice. So what do you do?

Here are three strategies we can help you with when you want to cash out some or all of your real estate profits:

  1. Use the combination of a charitable remainder trust and a wealth replacement trust to avoid taxes, increase personal cash flow, and increase the estate distribution to your children.
  2. Use IRC Section 721 to invest the property in a real estate investment trust and defer taxes.
  3. Use an installment sale to pay taxes slowly.

You have choices: Pay tax, pay no tax, or pay tax at your own pace. If you would like to discuss the options above, please don’t hesitate to contact me.