# Selling Rental Property Tax Strategies

> Three tax strategies help California real estate owners maximize profits when selling rental properties.
- Title: Selling Rental Property Tax Strategies | Shortify
- Summary: Three tax strategies help California real estate owners maximize profits when selling rental properties. California real estate owners can defer taxes…
- Keywords: california, real estate, tax strategies, 1031 exchange, delaware statutory trust, rental property, business, local, Selling, Rental, Property, Tax
- Source: Los Angeles Business Journal — https://labusinessjournal.com/custom-content/trusted-advisors/selling-your-rental-property-three-tax-strategies-every-owner-should-know
- Author: Kelly Garcia
- Published: 2026-11-02T21:49:41+00:00
- Read time: 1 min
- Topics: california, real estate, tax strategies, 1031 exchange, delaware statutory trust, rental property, business, local
## Selling Rental Property Tax Strategies
California real estate investors face federal capital gains taxes, california income taxes, and the 3.8% net investment income tax when selling rental properties.
## Option 1: Pay Taxes Immediately
Selling outright provides immediate liquidity for retirement, investments, debt reduction, or other opportunities without real estate ownership restrictions.
## Option 2: 1031 Exchange
Investors defer taxes by reinvesting in qualifying replacement property within 45 days of sale and completing the exchange within 180 days.
## Option 3: Delaware Statutory Trust
Investors exchange property for passive DST interests to receive distributions without managing tenants, repairs, or maintenance.
## Tax Planning Before Sale
Real estate owners should coordinate with cpas, real estate professionals, and investment advisors before selling to evaluate tax consequences and financial goals.
## Key Question for Owners
The most important question is how much will be kept and how that wealth will work for the owner after selling.
## Key takeaway

California real estate owners can defer taxes through 1031 exchanges, use DSTs for passive income, or pay upfront taxes to retain liquidity.