A 1031 Exchange, named after Section 1031 of the Internal Revenue Code, is a tax-deferral strategy used in real estate investing. It allows investors to sell one or more appreciated properties and defer capital gains taxes by reinvesting the proceeds into one or more like-kind properties. This deferral means that instead of paying taxes on the profit from the sale,
Investors can reinvest the full amount of their proceeds, thus leveraging more capital to grow their real estate portfolio.
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Demystifying Alternative Investments