Suppose you own a rental house investment property in which you have accrued $100,000 equity from appreciation in market value and gradual pay-down of your mortgage balance. You would like to use that $100,000 to acquire more investment properties. However, if you sell, you will owe capital gains tax. You ask if there is any way to use that $100,000 equity to buy more properties without paying tax on your sale profit? Purchase Bob Bruss reports online. The answer is "yes." It's called a tax-deferred exchange, authorized by Internal Revenue Code 1031. WHAT IS A TAX-DEFERRED EXCHANGE? To qualify for a tax-deferred exchange, a real estate investor must trade "equal or up" in both price and equity for one or more qualifying "like kind" properties without taking out any taxable "boot," su...
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