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.