Tax Shelter for Gain on Secondary Home

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Miscellaneous

If a taxpayer sells his second home held as a rental property for large gain, and during the same year buys a building to house a manufacturing facility, the taxpayer would have to do a qualified section 1031 exchange through an intermediary and roll all of the proceeds (gain) into the new investment property to avoid paying taxes on the gain. The taxpayer wouldn't be able to pull any monies out of the transaction.

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