5 Benefits of a 1031 Exchange Besides Deferring Taxes

Real estate investors use 1031 exchanges to reap the main benefit of deferring capital gains tax. Successful exchanges allow this deferment. They also allow the deferment of other taxes upon the sale of investment property. These savings can be huge. Bonus: there are five additional benefits of a 1031 exchange other than deferring taxes.

The deferment of taxes helps investors build more capital to invest. The benefits below present an additional attraction and investment flexibility. But, it is critical to understand that certain regulations apply. There are timing rules in which your property must meet. There are also limits on the types of property that qualify for an exchange. Internal Revenue Code section 1031 explains the allowances in great detail.

Savvy investors use 1031s for many reasons besides deferring taxes

5 Benefits of a 1031 Exchange Besides Tax-Deferment infographic
5 Benefits of a 1031 Exchange Besides Tax-Deferment

Besides these five benefits of a 1031 exchange, additional advantages may suit your individual investing goals. Download our free 1031 Exchanges Made Easy Guide or contact Midland 1031 today. We perform hundreds of exchanges every year for our clients. We’ll help you determine if this investing maneuver is the right technique for you.

Midland is a qualified intermediary with Certified Exchange Specialists® on staff. We ensure all elements of your exchange are performed seamlessly and in compliance with IRS regulations.

Defer Capital Gains Tax Using a 1031 When You Sell Investment Property

Defer Capital Gains Tax Using a 1031 Exchange Selling Investment Property

Savvy investors use 1031 exchanges to defer capital gains tax on the sale of investment property. These transactions also provide an avenue to defer depreciation recapture, healthcare, and state taxes. The IRS allows 1031 exchanges, so they are a perfectly legal investment strategy. However, there are specific criteria you must meet to reap the full benefits of an exchange.


1031 exchanges are also called “like-kind” exchanges. Successful exchanges entail the sale of one property and the use of those proceeds to purchase new property. Only investment or business-use property qualifies for an exchange.

The IRS requires investors to use a Qualified Intermediary to facilitate exchanges. Investors have 180 days to complete the exchange to defer capital gains taxes. The clock starts ticking the day the original property sells. At that point, investors must identify replacement property within 45 days. To clarify, you can purchase one or more replacement properties with the proceeds from the relinquished property’s sale. However, the new property’s total cost should be equal to or greater than the original parcel’s Net Selling Price (NSP).

Midland 1031 HugeTaxes Info

Investors appreciate the benefits of 1031 exchanges. Investors defer capital gains tax every time they use exchanges to buy and sell real estate. In fact, investors strategically use 1031s to defer those taxes to capture additional capital to reinvest. Another key point? Exchanges are used to acquire real estate in other states and to diversify or consolidate different types of property.

To learn about additional benefits of 1031 exchanges, read this article.

You can also contact Midland 1031 if you have questions. As a qualified intermediary, our firm handles hundreds of 1031 exchanges each year that help our clients defer capital gains taxes and use those saved funds to reinvest. We are always here to help!

1031 Exchanges Help Build Real Estate Investing Capital

Defer Capital Gains Tax Using a 1031 Exchange Selling Investment Property

The 1031 Exchange Process

1031 exchanges allow the deferment of capital gains taxes on the sale of investment property. These tax savings can help build real estate investment capital. These savings also provide an accumulation of funds to repeatedly acquire investment property. As a result, the exchange process is a real estate investor’s dream.

There is no limit to the number of exchanges investors can perform. Additionally, almost all property is permissible in exchanges. As long as the property is for business-use or investment-use only, it qualifies.

Watch this short video to learn about how exchanges can defer taxes on your investment property.

Click here to view other videos on Real Estate Investing and how exchanges help build capital.

Video Transcript: Wouldn’t it be nice to not pay taxes on the sale of your investment property? A 1031 exchange allows you to sell an investment or business-use property for another business or investment-use property of equal or greater value, deferring capital gains tax, depreciation recapture tax, state taxes, and health care tax. As long as you trade up in value, you’ll defer all taxes associated with the sale of your investment property.

All investment real estate qualifies, including single-family homes, multi-family homes, commercial real estate, land, and more. A 1031 allows the investor to: increase cash flow, acquire property with greater income potential, diversify or consolidate property, and move markets.

Stop paying taxes! Begin your 1031 exchange today by calling Midland 1031 at 239-333-1031. Midland 1031 is a Qualified Intermediary that has facilitated thousands of 1031 exchanges for clients throughout the United States.

Learn more by contacting Midland 1031 today.

Midland 1031 is a Qualified Intermediary. Our Certified Exchange Specialists® perform hundreds of exchanges every year. We are an experienced and trusted resource for investors across the nation who benefit from using 1031s to build real estate investing capital. So, commit to learning how you can do the same and contact us to learn more today. Or,click here to start your 1031 exchange.