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Why tax-deferred real estate exchanges are better than selling

Reinvesting profits in another property avoids huge taxes
Published on Aug 25, 2005

Some investors seem to enjoy paying taxes on their real estate sale profits. I don't. As a smart real estate investor, I hope you don't either. I still occasionally get letters from readers who say their real estate broker, their CPA or their attorney advised them to sell their investment or business property and pay the capital gain tax instead of making a tax-deferred exchange. For some unexplained reason, realty investors and their tax advisers in a few states have been the last to catch up and understand the huge benefits of tax-deferred property exchanges. I still remember receiving a letter, about two years ago, from White Plains, N.Y., where the investor said her CPA told her tax-deferred exchanges are "experimental" and haven't been tested yet in court! Just for the record, tax-deferred exchanges are legal in every state and they are now even being done in the slow-to-catch-on New England states! But finding CPAs and tax or real estate attorneys who understand them still isn'...

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