Are 1031 real estate exchanges the tool you’ve been seeking to accomplish your philanthropic goals?
There are a number of reasons to use 1031 like-kind exchanges in real estate investment. One of the most powerful, yet commonly overlooked might be to supercharge and guarantee your charitable aspirations are taken care of.
For many of us one of the highest purposes we can achieve is to give and help others. That certainly includes family and those closest to us. For many it also includes helping the community, others in more desperate need across the country, or even abroad.
While we might do this in many ways on a daily basis, most want to do more. That doesn’t always make it easy. There is a lot to take care of, and we want to ensure we maximize our impact. This makes tools like the 1031 an ideal vehicle for achieving this.
Investing in real estate is a great strategy for preserving wealth, generating passive income, and building long term capital. Yet, often so much of the potential financial rewards produced are wasted in taxes. That’s often high double digit percentages. When compounded over the years it becomes seven figure sums very quickly. The government certainly provides the structure for many needed services. Though most would argue that it is rarely the most efficient in funneling support to those in need.
1031 exchanges, self-directed IRAs, and other tax saving tools help investors retain their gains, and grow them tax free. They can often also help facilitate smoother and more profitable transitions of wealth later in life, and after you pass on.
These tax saving tools can then also provide better protection for philanthropic capital, help preserve and generate additional double digit gains to provide for family and other charitable goals during our lifetimes, and then leave a far larger nest egg to fund those things for many years after we are gone. They maximize our capacity in size, and often help put that capital in the hands of the right people at a time when they can best manage and use them well.
How are you maximizing your philanthropic potential?