Why This Matters for Families
When you sell property and make a profit, taxes can take a big bite. But with a 1031 exchange, you might roll that profit into a new property and skip paying taxes today.
That means more value stays in your portfolio.
Over time, you can keep repeating this. Instead of losing cash to taxes at each sale, you reinvest everything and build bigger value - property after property.
Now imagine that over 30 or 40 years. That’s a solid path to long-term wealth.
How It Can Help the Next Generation
Here’s where it gets interesting. When you pass down real estate, your heirs may get something called a "step-up in basis." That means the value resets to current market rates.
So if you’ve deferred taxes using 1031 commercial exchange for years, and then your kids inherit the property, they might not owe capital gains at all if they sell it soon after.
It’s like getting decades of tax deferral wiped clean.
This may sound complex, but it comes down to one thing: more wealth stays with your family.
What You Can Do Right Now?
If you're thinking long term, these steps can help you stay ready:
Keep clear records of every property swap
Work with a trusted intermediary
Use professional help when planning inheritance
Make sure your heirs understand the plan
You don’t need to be a millionaire to use this. Even one small commercial property can grow into something big over time.
What to Avoid?
This isn’t something to guess your way through. Some common mistakes include:
Missing the 45-day rule for identifying a new property
Picking the wrong replacement property
Forgetting to plan for future taxes
And one more thing: not all property qualifies. Your personal home doesn’t count. It needs to be an investment property.
So don’t wait until you’re ready to sell. Think about your future swaps now.
Final Thoughts
You’ve worked hard to build what you have. A 1031 commercial exchange might help you stretch that work further - across decades and generations. When done right, it’s not just a tax move. It’s a family plan.