How to Determine if a 1031 Exchange is Right for You

Good Candidate for a 1031 Exchange

There are many factors that you need to take into account when beginning a 1031 exchange. In this article, we are going to explain how to figure out if a 1031 exchange is a good fit for your situation.

Questions to Consider

Here are some questions to consider that will help you determine whether a 1031 exchange is a good option for you:

  • When are you closing on the sale of your relinquished property?
  • How have you used the relinquished property?
  • How long have you owned the relinquished property?
  • How do you hold title to the relinquished property?
  • What is the Fair Market Value of the relinquished property?
  • What is the estimated amount of sales proceeds?
  • How much did you pay for the old relinquished property when you purchased it?
  • What is your estimated remaining basis or current adjusted basis in the property?
  • What title company - or law office is closing the relinquished property?
  • What is the value of replacement property?
  • How do you plan to take title to your replacement property?
  • Will you have debt on your replacement property?

All of these items must be taken into account to determine whether or not you can move forward with a 1031 exchange. To find out if you are a good candidate for a 1031 exchange, fill out our form.

MN 1031 Exchange Services

At Commercial Partners Exchange Company, we have decades of experience helping taxpayers navigate the 1031 exchange process. If you are selling real estate or an item of personal property, a 1031 exchange may be able to help you defer capital gains taxes on the sale. Start realizing the benefits of a 1031 exchange today and defer your gains on the sale of real property! Our primary office is located in downtown Minneapolis, but we serve clients throughout the country. Contact us today to speak with one of our qualified intermediaries about your 1031 exchange.

  • 1031 Hotline: If you have questions about whether a 1031 exchange is right for you, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

 

© 2017 Copyright Jeffrey R. Peterson All Rights Reserved

Tips for Making Sure Your 1031 Property is Like-Kind

Like-Kind Property

If you know anything about 1031 exchanges, you’ve probably heard the term “like-kind.” In this article, we are going to share a few tips for making sure your 1031 exchange replacement and relinquished property is like-kind.

The Importance of Like-Kind

The like-kind rule is one of the most important regulations that govern the 1031 exchange of property. There’s a reason 1031 exchanges are often called like-kind exchanges. Basically, section 1031 states that your relinquished property and your replacement property both need to be like-kind in order to qualify for a 1031 exchange.

Consult with a Qualified Intermediary

If you are at all confused about what does and does not constitute like-kind property, contact a qualified intermediary who specializes in like-kind exchanges. Among other things, a qualified intermediary can answer all of your questions regarding like-kind property, and even advise you on what types of property to identify in your exchange.

Be Extra Careful with Personal Property

Like-kind has a pretty broad definition in real estate exchanges. However, the same is not true for exchanges of personal property, which have a much narrower definition of like-kind. In a real estate exchange, you can exchange pretty much any real estate for any other real estate (so long as it satisfies the other 1031 exchange rules). With personal property, your relinquished and replacement property needs to be very similar. For example, you can exchange an airplane for another airplane, but not for a fleet of trucks.

Minneapolis 1031 Exchange

Jeff Peterson has been facilitating 1031 exchanges of real and personal property for decades. Whether you’re selling a piece of commercial property, or a valuable piece of art, a 1031 exchange may help you defer capital gains taxes on the sale of your property. Contact Commercial Partners Exchange Company today to learn more about the 1031 exchange process and how you can benefit!

  • 1031 Hotline: If you have questions about like-kind property in a 1031 exchange, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

 

© 2017 Copyright Jeffrey R. Peterson All Rights Reserved

Can You 1031 Exchange Livestock of Different Sexes?

Livestock 1031 Exchange

Livestock that is held for use in one's stock or trade may be exchanged with a 1031 transaction. However, there are many rules and regulations that govern such an exchange. In this article, we are going to offer a few tips to keep in mind when exchanging livestock under section 1031. In particular, we will be discussing the rule surrounding the exchange of livestock of different sexes.

Livestock Held for Sale

Section 1031(e) provides that livestock of different sexes are not property of like kind. Livestock held “primarily for sale” in the ordinary course of business cannot be subject to 1031 treatment because this kind of property (“inventory” or one’s stock in trade or other property held primarily for sale) is categorically excluded under Section 1031 (a)(2)(A).  Stock in trade or other property held primarily for sale can’t be exchanged under 1031.

Same-Sex Livestock

Same-sex livestock not held for regular sale (such as breeding stock) may be exchanged if they are like kind. Under the current regulations, there is no clear guidance as to what constitutes like kind for livestock. However, experts have argued that a grade beef cow is probably like kind to a purebred registered beef cow because they differ only in grade or quality. Conversely, a dairy cow is probably not like kind to a beef cow because dairy and beef cows are entirely different types of livestock.

  • 1031 Hotline: If you have questions about 1031 exchanges of livestock, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

 

© 2017 Copyright Jeffrey R. Peterson All Rights Reserved

3 Tips for 1031 Exchanges of Rental Property Infographic

This infographic offers three tips to remember when 1031 exchanging rental property. For more 1031 infographics, check out this page.

Rental Property 1031 Exchange

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Items You Need to Start a 1031 Exchange

Items to Start a 1031 Exchange

Many taxpayers have heard of the tax-saving benefits of 1031 exchanges, but don’t know where to begin. Here’s what you need to start a 1031 exchange of real estate or personal property.

Contact A Qualified Intermediary

First thing’s first, contact a qualified intermediary! This should be the first step in any 1031 exchange. Your intermediary will advise you on the details of your exchange, answer your questions, and request all the required information from you to compile the 1031 exchange documents.

Provide Your Information to Your Intermediary

After you have contacted your intermediary, you should start compiling information regarding your transaction. Your qualified intermediary will need all of the following information to begin your exchange:

  • Your personal identification information. Your name, SSN, and contact information.
  • The name and contact information of your title company.
  • Copies of the purchase agreement and title report.

Using this information, your qualified intermediary will begin drafting your 1031 exchange documents and have these ready when you close on your replacement property.

Identification of Replacement Properties

Once you’ve completed the sale of your relinquished property, it’s time to identify your replacement properties in writing. Your qualified intermediary will help advise you on replacement properties and help prepare the required identification forms.

Twin Cities Qualified Intermediaries

If you are selling real estate, consider deferring your capital gains taxes with a 1031 exchange. With decades of experience, Commercial Partners Exchange Company is the go-to for your like-kind exchange needs. Contact our Twin Cities qualified intermediaries today to discuss the details of your exchange. Our main office is located in downtown Minneapolis, but we help clients throughout the state of Minnesota and the rest of the country. Defer your taxes and maximize your gains by starting your 1031 exchange today!

  • 1031 Hotline: If you have questions about items you need to start a 1031 exchange, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

 

© 2017 Copyright Jeffrey R. Peterson All Rights Reserved