Sell and pay the tax, or exchange and keep it working.
Every investment property sale comes down to this choice. The difference over a single transaction is often six figures, and it compounds from there.
Sell and pay, or exchange and reinvest
Selling means settling up
Federal capital gains, depreciation recapture, the net investment income tax and state tax all come due in the year you sell.
Exchanging moves the basis forward
Trade into another investment property through a qualified intermediary and the gain rides along instead of being recognized.
The gap compounds
The tax you did not pay stays invested. Over two or three exchanges that difference tends to dwarf the original gain.
Three steps, and we carry most of them
Call before you close
We confirm an exchange fits, map the deadlines against your timeline, and put the exchange agreement in place before the sale closes.
We hold the proceeds
Funds go from the closing table to us, never to you. That is what keeps the deferral intact.
You buy, we close it out
You identify and negotiate the replacement property. We handle the documentation, the funding and the reporting trail.
1031 Specialists
This is the calculation behind almost every exchange we handle, and it is worth running with real numbers before you list. Sometimes selling outright is genuinely the right answer. It should be a decision you made, not one a deadline made for you.
We are a qualified intermediary for IRC Section 1031 tax-deferred exchanges, facilitating exchanges for real estate investors in all fifty states. We handle the exchange agreement, the identification and closing deadlines, and the custody of exchange funds. Every exchange includes unlimited tax optimization consulting, audit protection and an attorney guarantee, on a simple flat fee you pay at close.
Sell and pay, or exchange and reinvest, answered
How much tax are we actually talking about?
It depends on your gain, your depreciation history, your bracket and your state. For a long-held rental it is frequently a quarter of the sale price or more once recapture and state tax are included.
Is exchanging always better than selling?
No. If you need the cash, or the replacement options are poor, paying the tax can be the right call. The point is to decide deliberately rather than by default.
Can I do a partial exchange?
Yes. Reinvest some and take some out. The portion you take out is taxable, and knowing that number before you close is the whole trick.
Talk to someone before the clock starts
Reach me directly, or call the main line and ask for anyone on the exchange team.
Main line
(631) 438-1031General email
info@1031specialists.comMailing address
30262 Crown Valley Pkwy, Suite B 464Laguna Niguel, CA 92677
The information on this page is general in nature and is not tax or legal advice. 1031 Specialists is a qualified intermediary, not a law firm, accounting firm or investment adviser. Consult your own tax and legal advisors about your circumstances before entering into an exchange.