Tax savings abound with real estate exchanges

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

(This is Part 6 of an eight-part series. See Part 1: Recent changes to the $250,000 home-sale tax exemption; Part 2: Personal-use time determines vacation-home tax break; Part 3: Moving costs beef up real estate tax deductions; Part 4: Homeowners take refuge in casualty loss assistance; Part 5: Real estate investing generates big tax benefits; Part 7: Home-business expenses add up to tax savings and Part 8: 10 most often overlooked real estate tax deductions.) If you own (or want to own) an investment property, it can become the basis for increasing your real estate wealth by making periodic trades up for larger properties. For example, my first tax-deferred exchange was a trade of my little three-unit apartment building for a larger nine-unit apartment building that offered fix-up profit potential. If I had not made that tax-deferred exchange, as authorized by Internal Revenue Code 1031, the profit on the sale of my three units would have been eroded by capital gain taxes. Purcha...