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Rental real estate can add diversification and income to an investors portfolio.  What some people aren’t aware of is there’s a way for you to sell one property and buy another without paying capital gains.  This is a called a 1031 exchange and it’s incredibly common among real estate investors.  Effectively, if you own a rental property on one side of town, instead of selling it and paying taxes and then buying another property, you could exchange one for the other.  There are very specific rules within the tax code (section 1031) which highlight the rules, but you should consult your CPA or someone who’s in the 1031 business (there are many people).

There was a great article in Financial Planning Magazine recently that I’d like to share which spells out the benefits and answers FAQ’s.

1031 Exchanges

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Best Regards,

Jared Toren
CEO & Founder

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Author: Jared Toren

Jared Toren is CEO and Founder at Proper Wealth Management. Proper was born out of frustration with the inherent conflicts of interest at big brokerage firms influencing advisors to sell products that were not suitable for clients but profitable to the firm along with a consistently mixed message of who’s interest was supposed to be put first; the clients’, the firms’, shareholders or advisors.

At Proper, our clients interests come first. We are compensated the same regardless of which investments we utilize so there’s no incentive for us to sell high commission products. Since we focus on a small number of clients, we are able to truly tailor our advice to each person’s unique circumstances.

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