It is often possible to achieve this goal by running a 1031 exchange. The transaction is named after the corresponding section of the Internal Revenue Code. It allows taxpayers to defer the payment of capital gains if they reinvest the profits from the sale of investment property in a similar asset. The intention is to allow real estate investors to invest capital gains from the sale of properties in an opportunity zone fund that will be used in specific neighborhoods and cities.
Another way to reduce or avoid capital gains when selling properties is to invest in real estate in qualified opportunity zones.