What is a 1031 exchange and how could it benefit you? The 1031 exchange strategy allows you to defer paying capital gain taxes when selling a property. Instead, you can reinvest those proceeds into another property.

The benefit of the exchange is that you can invest your capital gains into a higher quality asset and have the option to diversify your investment portfolio by investing in multiple asset classes. The challenge with a 1031 exchange is that it must be completed within a specified timeframe, which can be difficult to meet when searching for a replacement property in a market with a lack of supply.

The laws around 1031 exchanges are subject to change, which could impact how these transactions take place moving forward.

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And if you have any questions about utilizing a 1031 exchange in your next commercial real estate investment sale, please reach out to Rokos Advisors today. We are here for you and happy to help.