New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Zillow Group Employees: Unlocking the Benefits of a 1031 Exchange for Your Real Estate Investments

Healthcare Provider Update: Zillow Group offers generous health insurance benefits including medical, dental, vision, and mental health coverage. Employees receive employer contributions to HSAs and FSAs, life and disability insurance, and access to wellness reimbursements. Zillow also provides paid parental leave, fertility support, and a 401(k) match. Zillow Group Healthcare costs in the United States are projected to continue rising through 2026, with insurers proposing significant premium increases for Affordable Care Act (ACA) plans. A recent analysis found that ACA insurers are seeking a median premium increase of 15% for 2026, marking the largest hike since 2018. This surge is attributed to factors such as the anticipated expiration of enhanced premium tax credits, rising medical costsincluding expensive medications and increased hospital staysand a shift in the risk pool towards higher-cost enrollees. Without the renewal of enhanced subsidies, out-of-pocket premiums for ACA marketplace enrollees could increase by more than 75% on average. Click here to learn more

If you want to add investment real estate to your portfolio, you may want to know what a 1031 Exchange is. While the rules and regulations for this tactic can get complicated, understanding the basic concepts may help you decide if this strategy is right for you.

Conducting a 1031 Exchange involves a complex set of tax rules and regulations. Before moving forward, consider working with a professional familiar with the rules and regulations. Also, this article is for informational purposes only. It is not a replacement for real-life advice, so consult your tax or accounting professional before moving forward with a 1031 Exchange.

Here's what a 1031 Exchange is and some requirements to help Zillow Group employees determine if they should pursue this avenue further.

What is a 1031 Exchange?

In the simplest terms, a 1031 Exchange is a real estate investment strategy that allows Zillow Group employees to defer their capital gains taxes on an investment property if they sell it and buy another 'like-kind' property. According to the Internal Revenue Service, 'If you make a like-kind exchange, you are not required to recognize a gain or loss under Internal Revenue Code Section 1031.'

1031 Exchange Requirements

While a 1031 Exchange can be an excellent strategy for deferring capital gains taxes, there are some requirements to consider to ensure that both properties are eligible. Here are a few of the main requirements:

The property you sell must have been an investment property, not your primary residence. The IRS defines a property as a primary residence 'if it's used for personal purposes during the tax year for more than the greater of 14 days or 10 percent of the total days rented to others at a fair rental value.'
Because a 1031 Exchange is considered a swap, you need to designate the next property shortly after selling the first property. According to the IRS, 'You have 45 days from the date you sell the relinquished property to identify potential replacement properties.'
In addition to this 45-day rule, you must close the new property within 180 days.
Lastly, the funds from the 1031 Exchange must be in an escrow account, and you can't receive them personally.

What Zillow Group Investors Might Get the Most Out of a 1031 Exchange?

As you can see, there are a lot of specifics to consider when researching 1031 Exchanges. Because of this, they aren't suitable for everyone. A 1031 Exchange may be appropriate for Zillow Group employees looking to acquire additional real estate, especially if you already have an investment property.

Another consideration with a 1031 Exchange is that if you pass away without selling the property obtained through a 1031 Exchange, your heirs may not pay capital gains taxes. In addition, they may not inherit it at its stepped-up market rate value.