How to Not Pay Capital Gains Taxes When Selling Your Real Estate

Want to sell an investment property without paying huge capital gains taxes? Here's how a 1031 exchange keeps more of your money working for you.

Hi, I'm Tanja Odzak, Realtor with eXp Realty, helping people sell and buy homes right here in the East Bay for the last 10 years.

A 1031 exchange lets you reinvest the profits from selling an investment property and defer the taxes you'd normally owe. Three major benefits: tax deferral, reinvest 100% of your equity into a new property instead of losing a chunk to taxes. Continued wealth building, keep upgrading into larger or more profitable properties and grow your portfolio faster. And estate planning, pass properties down through continued exchanges so heirs can eventually avoid capital gains taxes entirely.

The rules are strict. You must identify a new property within 45 days and close within 180 days to qualify. The new property must be like-kind, an investment, not a primary residence. You must use a qualified 1031 exchange company to hold the funds, that money can never touch your own bank account, and you have to reinvest all proceeds into a property of equal or greater value to defer 100% of the taxes.

I'm Tanja Odzak, and I've sold over $100 million worth of homes with a decade of experience in the East Bay, including handling my own 1031 exchange. My advice before you start one: consult your Realtor, your tax professional, and a 1031 exchange company together. If you're thinking about selling an investment property, let's talk about maximizing your return.