1060 - Reverse 1031 Exchange: What It Is & How It Works by Samantha Hawrylack

To understand a reverse 1031 exchange, you should first make sure you know the ins and outs of a 1031 exchange. Key differences exist between a standard 1031 exchange and a reverse 1031 exchange, designed to defer taxes while investing in real estate. Read on to learn more about what it is (and how it differs from a 1031 exchange), how to complete one, and how it can benefit you. What Is a Reverse 1031 Exchange? A reverse 1031 exchange is a tax deferment strategy that allows real estate investors to purchase a second investment property before selling their relinquished investment property—and, importantly, defer capital gains taxes and other taxes that you would normally need to pay at the sale of a property. Because a reverse 1031 exchange is more complicated than a standard 1031 exchange, it’s important to understand it fully before proceeding. Learn more about your ad choices. Visit megaphone.fm/adchoices