Great wealth has been accumulated by real estate investors who strategically buy properties, resell them at a gain and reinvest their gains into new properties. It is not uncommon for an investor to sell a building and reinvest 100 percent of their gains into a new building or multiple buildings by utilizing a “1031 tax-deferred exchange.” Taxes on these gains can be deferred for years and in return investors who utilize these exchanges multiple times have an opportunity to quickly build a large portfolio of real estate.
Yes, generally taxes will be due for the gains, but being able to use pre-tax dollars increases buying power and allows for investors to build upon their wealth at a much more rapid rate. This is a great strategy for sellers of real estate. Buyers typically do not have to worry about paying any taxes until they sell their properties. Or do they?
You might be shocked to hear that purchasing property with cryptocurrency might incur an unexpected tax for the buyer. Below, we discuss what you should know about the tax implications of purchasing real estate…
