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Postponing Taxes |
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Dear Edith: I read in one of your columns that there is a way to avoid taxes on the capital gains of an income property if you buy a similar property. Can you provide the information again? I have scoured the IRS site and only found a barter type possibility. My husband is selling a multifamily at a substantial profit. We would like to reinvest, especially if it involves a savings on taxes |
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The tax treatment you are looking for is a Section 1031 tax-deferred exchange, available (with specific time-limit paperwork) for the sale of investment property and prompt replacement purchase of like-kind property. Note the word "deferred". The tax is not avoided, merely postponed into the future. |
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Edith
Originally published on June 13, 2005 |
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