Is it smart to take the tax hit now from a rental property acquired through a 1031 exchange and pay off all my debt?
I have a rental property worth $350,000 that I could sell and pay off the mortgage on my personal residence, car loan, and about $30,000 in credit card debt. The rental property was acquired through a 1031 exchange so I would owe about $42,000 in taxes (according to my accountant). Is it smart to take the tax hit now and pay off all my debt?
This is a dousey of a question. To be honest there is a lot of information surrounding the soultion that I would need to know in order to help you arrive at the decision. I would need to know things like:
- How old are you?
- Is the property cash flowing? How much?
- Is the rental property paid off?
- How long until your primary residence is paid off?
- What retirement assets do you currently have?
When we look at the big picture, and bring all the information together the answer can reveal itslef very clearly on what to do. Rahter than looking at the situation as a single transaction. I am happy to go over this with you at no charge, and no-obligation. You can book a time instantly by following this link: https://calendly.com/jcjones/investopedia
Hope to hear from you before you make a decision.
-Jordan Jones, RFC