Keep 100% of Your Cash Working for You: The Benefits of a 1031 Exchange

We are pleased to introduce Bill Exeter, CEO of Exeter 1031 Exchange Services, LLC as one of our nationwide investment expert partners. As a leading national provider of comprehensive 1031 Exchange services, Bill Exeter has contributed the following article from his 1031 Exchange Guidebook on our website to provide valuable insights for investors in the area of 1031 Exchanges.

1031 Exchange Benefits

Income Tax Consequences

The sale of investment real estate may result in the recognition of ordinary income, capital gain, depreciation recapture and/or Medicare Surcharge (“Obamacare tax”) income tax liabilities. Payment of these income tax liabilities reduces the amount of cash available for reinvestment and makes it difficult for you to reinvest in larger, more profitable properties. Using a 1031 Exchange, you can defer the payment of your income tax liabilities, keeping 100% of your cash working for you by reinvesting in replacement property.

Exchanging Throughout Your Lifetime

The 1031 Exchange is certainly a great transaction tool to defer the payment of your income tax liabilities when you sell investment real estate, but it is much more than that. It is also a great wealth building tool. It allows you to continually defer the payment of your capital gain and depreciation recapture income tax liabilities over your lifetime. This means that you continue exchanging properties as a life-long strategy, always deferring the payment of your income tax liabilities and keeping your equity working for you. 

Using this strategy, the value of your real estate portfolio, and consequently your net worth, will grow exponentially faster over your lifetime as you continually defer the payment of your income tax liabilities.

Step-Up In Cost Basis

After your death, your heirs will inherit your property and generally receive a step-up in cost basis equal to the fair market value of the property at the time of your death. Your heirs can immediately sell the property without incurring any capital gain and/or depreciation recapture income tax liabilities.

We hope the insights provided by Bill Exeter of Exeter 1031 Exchange Services, LLC in this article have been informative and beneficial. We at CBC Capital Advisors are proud to partner with such a distinguished firm. Together, we are committed to facilitating a seamless 1031 exchange process for our clients. Our collaboration ensures that you receive comprehensive support and guidance, making your exchange experience as smooth and efficient as possible.

For the past 40+ years it has been our honor and pleasure to help clients achieve their investment goals through commercial real estate investing through…

  • Our Exclusive Nationwide Investment Network
  • Off-Market Commercial Real Estate Opportunities – Nationwide
  • and Saving Taxes with 1031 Exchanges

To Learn More, Give CBC Capital Advisors a Call at (806) 793-0888

In addition, you can learn all about our exclusive nationwide investing network and capabilities by watching Rick Canup’s short investment presentation below.