Jeremiah Boucher built a $400 Million portfolio of commercial assets (self-storage facilities, mobile home parks, industrial assets) from zero, through constant improvement, investing ahead of the curve, and hard work & execution.

In this episode:

• 1031 Exchanges Are a Tax Deferral Strategy, Not a Tax-Free Loophole: They allow investors to defer capital gains and depreciation recapture taxes when selling investment or business-use property, provided the proceeds are reinvested into like-kind property.
• Bonus Depreciation Benefits Are Shrinking: Recent reductions in bonus depreciation have made 1031 exchanges a much more attractive strategy for investors looking to manage capital gains and recapture taxes.
• Depreciation Recapture Can Have Major Tax Implications: Investors pay 25% tax on regular straight-line depreciation recapture, and up to 37% on accelerated (“bonus”) depreciation recapture when selling—a potentially huge tax bill.
• When to Use a 1031 Exchange: Ideal scenarios include maxing out value or depreciation of a property, seeking less management-intensive investments, avoiding major capital expenditures, upgrading tenant stability, or finding better cash flow.
• Five Major Rules Must Be Followed: These include acquiring like-kind property, adhering to strict identification (45 days) and closing (180 days) timelines, and using a qualified intermediary to hold the sale proceeds.
• Qualified Intermediaries Play a Critical Role: The QI must hold your funds in a separate trust or escrow account with you as the beneficiary—failure to use a reputable QI could result in loss of your exchange funds.
• Not All Properties Qualify: Only investment or business-use properties are eligible; primary residences and most vacation homes do not qualify unless they’ve been used as rentals under specific rules.
• Passive 1031 Exchange Options: Investors can exchange into Delaware Statutory Trusts (DSTs), triple net (NNN) leased properties, or Tenant-in-Common (TIC) interests for more hands-off investments.
• Pitfalls and Mistakes to Avoid: Touching the proceeds before they go to the QI, missing deadlines, or failing to match or exceed the value of the replacement property can all disqualify the exchange.
• 1031 and Legacy Wealth :Continuously exchanging into higher-value properties lets investors avoid taxes during their lifetime, and heirs receive a step-up in basis upon death—making gains effectively tax-free generationally.

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