For most investors, commercial real estate is financially leveraged. These investments often grow in value due to market growth, property improvements such as aesthetics, new or enhanced structures, and good-paying tenants.

To capitalize on this increase in value, investors typically sell their properties and reinvest in bigger or better opportunities. However, to avoid being taxed on capital gains, the government offers certain plans that allow investors to defer paying these taxes.

1031 exchange

One such plan is the 1031 Exchange, also known as a Starker Exchange or Like-Kind Exchange. Defined under section 1031 of the Internal Revenue Code (IRC), this strategy allows real estate investors to shift their investments without immediately incurring tax liabilities.

Instead of paying taxes upon selling, investors can reinvest the proceeds into another property, keeping their capital working for them.

There are various options available to defer tax liability based on the investor’s overall strategy. This article focuses on two popular vehicles: the 1031 Exchange and the DST (Delaware Statutory Trust).

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Meet The LeveragedCRE Investment Team

Phill Tomlinson and Eric Butler are seasoned commercial real estate brokers with over 44 years of combined experience. They lead the LeveragedCRE Investment Team at Commercial Properties, Inc. (CPI) in Scottsdale, Arizona, specializing in investment sales and tenant/landlord representation across the Phoenix and Scottsdale submarkets.

The team leverages their extensive knowledge and expertise to help investors and property owners maximize their returns and navigate complex real estate transactions with confidence.

Stay informed with the latest in Commercial Real Estate strategies designed to enhance your income property investment results by bookmarking www.leveragedcre.com. Let us help you stay ahead in the market!