Can Form 4797 Concise 2022-2023

Most people are aware of the fact that when you sell a long term investments such as real estate or stocks you have to pay taxes and these taxes don't usually come cheap currently capital gains tax is 15% and California has its own capital gains tax of nine point three percent to put this in perspective if you bought a property for five hundred thousand and years down the line you sell the same property for a million dollars on that five hundred thousand dollar profit you have to pay a hundred and twenty one thousand five hundred dollars plus your cost recovery recapture that's a huge chunk of cash but did you know there's a way you can defer that not even have to pay a single penny it's called a 1031 tax deferred exchange or 1031 exchange for short a 1031 exchange is when you sell your property and buy another like-kind property within a certain time frame and follow specific rules now you have to note this is a tax deferred investment strategy what that means is that you will just keep rolling over what you owe in taxes to some future date if you ever decided completely abandon investing in real estate altogether you're going to have to pay it all back the idea though is to continuously roll it over indefinitely until you pass away now that we have all that explained let's get to how a 1031 exchange works shall we let's say you bought a property ten years ago for a million dollars and today you can sell the exact same property for two million dollars the first step that needs to be taken when doing a 1031 exchange is the process of finding a good qualified intermediary or a Qi Qi...