Mark Kohler explains why crypto gains can't go into a 1031 exchange, which only works for real estate swaps. Instead, he suggests holding crypto in a retirement account or investing gains in Qualified Opportunity Zones to defer taxes.
I like. I like Yanni's question. Hey, guys, can I buy a property from my capital gains from cryptocurrency, like a 1031 exchange to save on taxes? Now, Yanni, this is the important distinction here. If you bought these, the have the crypto over here personally. You're on the asset side over here. When you sell it, you're going to pay tax. Even if you reinvest it and buy real estate, there's no way to do a 1031 exchange. 1031 exchanges only work real estate for real estate. So you can't go crypto to real estate. But if you were over here and you had crypto in your retirement account, sell the crypto, no tax, go buy real estate.
Yanni, I got an idea for you, though. This is what tax lawyers do. You call us. We want to save and make you 10 times whatever you pay us. Here's an idea, Johnny, sell the crypto, have a capital gain. Go buy an opportunity zone piece of real estate. You can do that to defer the capital gain and even minimize the amount of capital gain. So you would sell the crypto and turn around and buy real estate in an opportunity zone. I've got an article on that, some YouTube videos on that. We did
a whole podcast on. We did a whole podcast. The
money yawning is not in your retirement account. You're working in this world and not using a 1031. But opportunity zone.
Yeah, Opportunity zones are where you can take capital gains from stock or even crypto and reinvest them in certain real estate in locations. Avoid the tax.
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