An UPREIT or 721 exchange can be used to defer capital gains tax when selling real estate. An UPREIT is similar to a 1031 exchange, but is used by investors who want to invest in a REIT but do not have qualifying property to relinquish to the REIT.
In this scenario, an investor can combine the 1031 exchange and the 721 exchange in order to invest in the REIT while at the same time deferring their capital gains taxes.
In this video, we explore:
Why a 1031 exchange doesn’t work for particular investors
Why REIT shares do not qualify for a 1031 exchange
How investors can contribute qualifying property to a REIT in exchange for partnership shares
How to combine a 721 exchange with a 1031 exchange
How long you need to hold onto fractional interest in qualified property in order to invest in a REIT
Whether or not fractional interest in qualified property pays dividends
Whether or not investment in a REIT is the end of the line for capital gains tax deferral
Want to learn more about the pros and cons of an UPREIT, the specific tax advantages of a 721 exchange, and how to use an UPREIT in estate planning? Read our UPREIT Guide:
The 721 Exchange, or UPREIT: A Simple Introduction
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Watch more informational videos:
Delaware Statutory Trust Explained (In Under 1 Minute)
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Delaware Statutory Trust 1031: The Basics (In Under 2 Minutes)
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Learn more at our website:
What Are the 1031 Exchange Property Identification Rules?
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1031 Exchange Basics: A Simple Introduction
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