Brooklyn Townhouse Specialist · Corcoran
A 1031 exchange lets you defer capital gains taxes when selling a Brooklyn investment property — if you follow the rules. Here's what you need to know.
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A 1031 exchange — named for Section 1031 of the Internal Revenue Code — allows you to defer capital gains taxes when you sell an investment property, provided you reinvest the proceeds in a like-kind property within specific timeframes. For Brooklyn townhouse and multifamily owners who have seen significant appreciation, the tax deferral can be worth hundreds of thousands of dollars.
The 1031 exchange rules are strict. You have 45 days from the sale of your relinquished property to identify replacement properties, and 180 days to close on the replacement. These deadlines are absolute — missing them means losing the tax deferral. Working with a qualified intermediary (QI) who holds your proceeds during the exchange is required.
Both your relinquished property and replacement property must be held for investment or business use — not personal use. A rental townhouse qualifies. Your primary residence does not. The replacement property must be of equal or greater value to fully defer the gain.
Common Brooklyn 1031 scenarios include: selling a two-family in Bed-Stuy and exchanging into a three-family in Ridgewood; selling a brownstone in a high-appreciation neighborhood and exchanging into a larger multifamily with stronger cash flow; or exchanging out of a stabilized building into free market properties with better income potential.
Omari has experience working with investors on both sides of 1031 exchanges in Brooklyn and Western Queens. He can help you identify and evaluate replacement properties that meet your investment criteria and exchange timeline. The first step is understanding what your current property is worth.
Start with a free property valuation — the honest number based on your specific property and block. No pitch, no follow-up unless you want it.
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