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Section 1031 of the Internal Revenue Code allows an owner of investment property to exchange property and defer paying federal and state capital gain taxes (15-20%+ applicable state taxes) and taxes on gain from depreciation (25%) and the Obama Care tax (3.8%) when required if they purchase a “like-kind” property following the rules and regulations of the Internal Revenue Code. This allows investors to use all of their proceeds from their sale to leverage into more valuable real estate, potentially increase cash flow, diversify into other properties, reduce management or consolidate into one property.

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