Talk to an Advisor

Can I Defer Capital Gains Taxes On My 401K Investment In A 1031 Exchange Indefinitely?

At 1031 Exchange Place, we specialize in 1031 exchanges, which allow investors to defer capital gains taxes on the sale of investment property by reinvesting the proceeds into a like-kind property.

However, it is important to note that 1031 exchanges apply specifically to investment properties, such as real estate, and not to financial investments like stocks, bonds, or retirement accounts, including 401(k)s. Consequently, it is not possible to defer capital gains taxes on a 401(k) investment using a 1031 exchange.

In the case of a 401(k) account, you may be able to defer taxes on your gains by contributing pre-tax dollars and allowing the investments to grow tax-deferred until you withdraw the funds. Withdrawals will generally be taxed as ordinary income, subject to certain exceptions and requirements.

For more information on 401(k) tax implications, we recommend consulting a financial advisor or tax professional who can provide guidance specific to your situation. If you have any further questions about 1031 exchanges and their applicability, please don’t hesitate to contact us at 1031 Exchange Place.