Understanding Real Estate

Tax-Deferred Exchanges

You do not have to buy property at the same time you are selling. The law allows for what is called a "Delayed Exchange". This lets you sell now and buy your "replacement" property at a later time. However, the law does set up some strict timing requirements which will be explained later.
There are some interesting ways you can plan your exchange. For instance, you can sell your property to one party and buy your replacement property from another. You can sell one property and buy two, three or more replacements! Here is a good example: if you sell a $450,000 waterfront lot you can buy a $50,000 condo rental, a $100,000 parcel of raw land as an investment, a $150,000 duplex, and a $200,000 commercial building, and PAY NO TAXES!
Also, you can sell several properties and buy only one property with the sales proceeds. In this instance, you may sell a triplex, a rental single family home and acreage for $400,000 and buy an office building for $500,000 and still pay no income taxes!