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How can I avoid paying capital gains taxes with a 1031 Exchange? |
To avoid the payment of capital gain taxes the Exchanger should follow three general rules: (a) purchase a replacement property and or properties that is the same or greater value as the relinquished property, (b) reinvest all of the exchange equity into the replacement property and (c) obtain the same or greater debt on the replacement property as on the relinquished property. The Exchanger can offset the amount of debt obtained on the replacement property by putting the equivalent amount of additional cash into the exchange.
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