There exists an incredibly powerful wealth-building strategy that has been around since 1921, and is still used by the country’s most savvy real estate investors. Remarkably, the IRS made this tax deferral possible.
Put simply, you can defer (possibly forever, if you meet a certain condition which Ill share in a moment) capital gains taxes on the profits from the sale of a foreign property if you use the proceeds of the sale to buy another foreign property.
Ive helped people perform these types of exchanges (Section 1031 or like kind exchanges) for the past six years. I can help you, too, but first, a couple of caveats:
1. You cant exchange U.S. real estate into foreign real estate. This is a source of some confusion, probably dating back to a time before like kind property was clearly defined and codified by the IRS. Although there have been cases where a 1031 exchange of U.S. real estate for foreign property has been performed when the replacement property was in Puerto Rico or the U.S. Virgin Islands, the cold hard fact is that today you cannot 1031 exchange U.S. property for foreign real estate in most parts of the world.
2. Unless you...
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