Unlocking Tax Deferral: Leveraging Opportunity Zones & Mastering 1031 Exchange Property Identification

Small Business Tax Savings Podcast

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Are you maximizing the potential of your real estate investments through 1031 exchanges and Opportunity Zones?

In this podcast, Mike Jesowshek and guest Michael Scherer delve into the intricacies of 1031 exchanges, focusing on various replacement property options, including Delaware Statutory Trusts (DSTs) and Qualified Opportunity Zones. They discuss the advantages of passive investment through DSTs, the strategic importance of planning and consulting with tax advisors, and the potential tax deferral benefits of investing in Opportunity Zones. The conversation emphasizes the need for investors to align their investment choices with their financial goals and the importance of thorough planning.

[00:00 - 04:37] Replacement Property Options and Delaware Statutory Trusts (DSTs) in 1031 Exchanges

• Mike Jesowshek introduces the topic and welcomes back expert Michael Scherer to discuss 1031 exchange replacement properties and Opportunity Zones.
• Michael explains the concept of Delaware Statutory Trusts as a passive investment option for 1031 exchanges.

[04:38 - 06:17] Direct Real Estate Investment vs. Passive DST Investment

• Michael compares the differences between active real estate investments and passive DST investments.
• What are the investor involvement and management responsibilities in different types of investments?

[06:18 - 12:59] Strategies for Maximizing Tax Deferral and Qualified Opportunity Zones as an Investment Avenue

• Exploring methods for achieving full tax deferral by combining different investment strategies, like DSTs and direct property purchases.
• Michael highlights the Importance of strategic planning and advisory collaboration.

[12:59 - 19:06] Navigating the Complexity of 1031 Exchanges and Investment Options

• How to approach 1031 exchanges, including the importance of selecting the right replacement properties?
• Michael explains the concept of Qualified Opportunity Zones, their benefits, and the tax implications involved.
• Opportunity Zones can serve as a fallback for failed 1031 exchanges or as a strategic choice for deferring taxes.

[19:07 - 22:57] The Importance of Planning and Expert Advice

• Michael emphasizes the value of expert advice and the need for early planning in the investment process.

Direct Quotes:

"Understanding the investor's goals and objectives and working with their tax advisor is critical." - Michael Scherer

"It all comes down to planning and understanding what your objectives are." - Michael Scherer

Connect with Michael!

LinkedIn: https://www.linkedin.com/in/michael-scherer-caia-8147504/

Email: [e-mail]

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

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