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June 9, 2020

1031 Exchanges Are Challenging in a Pandemic. Opportunity Zone Funds Can Offer a Solution


National Real Estate Investor
By Erik Hayden

My heart goes out to all of those real estate investors who sold a property before COVID-19 struck. Most folks had it all planned out. They were going to avoid paying capital gains taxes on the sale of their property with a 1031 exchange.

Now, investors are having difficulty completing their 1031 exchanges. A government extension (until July 15th) gives them more time to close on a new property, but it isn't enough.

Investing in Opportunity Zone Funds is an excellent alternative to a 1031 exchange with similar tax benefits and a lot less stress.

I've worked in the real estate world for nearly two decades, and I've seen my share of complex property transactions when it comes to 1031 exchanges. While an exchange can be a terrific tax-free investment strategy, it can also be a tricky deal that goes south fast.

To qualify for the 1031 exchange tax benefits, real estate investors must identify their next property purchase within 45 days of selling their last property. And they must reinvest their gains in a replacement property of equal or greater value within 180 days.

In this uncertain market, I'm talking to tons of investors who are struggling to find 1031 exchanges before the impending July 15th IRS deadline. Read more.

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