If you’re a contractor or builder selling real estate and paying capital gains tax, there’s a good chance you’re overpaying.

A 1031 exchange lets you sell investment or business property and defer capital gains taxes by reinvesting into another qualifying property.You’re not cashing out, you’re scaling.

Why contractors have a major edge:

🔹 You add value cheaper than anyoneBuy ugly. Build smart. Force appreciation.

🔹 You can use construction & improvement 1031sLand or fixer → build → improvements count toward value.

🔹 You scale without resetting taxesReinvest profits instead of shrinking them with every sale.

Common mistakes:❌ Selling before setting up the exchange❌ Mixing personal use with investment property❌ Missing 45-day or 180-day deadlines❌ Using advisors who don’t understand construction + real estate

Long game:Keep exchanging and never cash out → heirs may receive a stepped-up basis, potentially eliminating deferred gains.

If you’re a contractor not using 1031s, you’re playing on hard mode.

Disclaimer: This content is provided for educational purposes only and is not legal, tax, accounting, or financial advice. Every situation is unique, so consult your own attorney, CPA, or financial advisor before making decisions based on this information.