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While you cannot get out of paying taxes entirely, you can defer them.


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How do you avoid paying taxes when selling real estate? I have two options for you.


You cannot actually avoid paying taxes, but you can defer them or take advantage of the situations that you have when it is your primary residence by using one of these two methods:


1. The 1031 exchange. With the 1031 exchange, you can sell an investment property and transfer the equity into another property as long as you do it within a certain amount of time. You cannot use any of that money. And, you have to use a 1031 exchange company to shelter all that cash as you move it. This is because the government will not allow you to touch the money.


If you are living in the home that you fixed up for

two of the last five years, you can sell the property without paying the gains of the sell.


2. A primary residence. When you buy a house and you are living in it as your primary residence and then sell it quickly, you do not have to pay any money on the gains of the sell. You do not have to exchange the money into a different property.


An example of this is when you purchase a home at a large discount because it needs to be fixed up, and then you complete the repairs and increase the value. As long as you are living in the home for two of the last five years, you can sell the property without paying the gains and cash out on it. If you do the repairs and wait, you will be subject to capital gains taxes.


If you have any questions about this or are interested in buying or selling, please feel free to contact me by phone or email. I look forward to speaking with you about your real estate needs soon.