Pros and Cons of Deferring Taxes With a 721 Exchange

721 exchanges, or UPREITs, can be an excellent tax mitigation strategy for real estate investors, though they’re not perfect for everyone.

A row of historic pastel-colored buildings with classic bay windows in San Francisco, Calif.
(Image credit: Getty Images)

Real estate investors have long held two truths to be self-evident: first, that investing in real estate, while not risk-free, is one of the most effective ways to build wealth over the long run; and second, that one of the primary handicaps to building wealth through real estate investment comes in the form of taxes — more specifically, capital gains taxes.

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Daniel Goodwin
Chief Investment Strategist, Provident Wealth Advisors

Daniel Goodwin is a Kiplinger's contributor on various financial planning topics and has also been featured in U.S. News and World Report, FOX 26 News, Business Management Daily and BankRate Inc. He is the author of the book Live Smart - Retire Rich and is the Masterclass Instructor of a 1031 DST Masterclass at www.Provident1031.com. Daniel regularly gives back to his community by serving as a mentor at the Sam Houston State University College of Business. He is the Chief Investment Strategist at Provident Wealth Advisors, a Registered Investment Advisory firm in The Woodlands, Texas. Daniel's professional licenses include Series 65, 6, 63 and 22. Daniel’s gift is making the complex simple and encouraging families to take actionable steps today to pursue their financial goals of tomorrow.