Real Estate & Rental Properties
For appreciated real estate, the wrong sale can trigger significant capital gains tax. The right structures — including a 1031 exchange for investment property and a QPRT for a personal residence — can defer or reduce that tax while keeping the property doing what you want it to do.
What you should know
- A 1031 exchange allows you to defer capital gains tax when you sell appreciated investment real estate and reinvest in like-kind property — subject to strict identification and closing deadlines.
- The 1031 deadlines are firm — typically 45 days to identify replacement property and 180 days to close. Missing either generally triggers full taxation.
- A Qualified Personal Residence Trust (QPRT) transfers a primary or vacation home to your beneficiaries at a reduced gift-tax value, while you keep the right to live there for a specified term.
- The step-up in basis at death adjusts a property’s basis to its fair market value — generally wiping out the lifetime capital gains your heirs would otherwise owe.
- Rental properties held in an LLC can isolate liability inside the property. Held in personal name, they can expose everything else you own.
1031 or QPRT — which fits your real-estate situation?
Five short choices. Brent reads your answer back to you at the end.
A 30-second guided quiz. Get a personal read on which tool likely fits.