| It's called a 1031 exchange. What you do is when you sell the property, you have to make sure that the money from the sale is escrowed as part of a 1031 tax-exchange.
From the time of settlement, you will have 45 days to identify other potential properties that you want to roll the money into. Once those properties are identified, you will have 180 days to settle on them.
You have to be very careful with this process. If you identify a property and the deal falls through on it, you may end up blowing the chance at avoiding capital gains if that initial 45 day period has expired. Often times investors will identify multiple properties so that if a deal were to fall through, they would still have a property to roll the money into and not lose out to capital gains taxes. |