Rethink Your Tax Considerations for Retirement Planning

Tax Considerations 1031 Exchange

There’s a lot to consider when planning for retirement. One useful retirement planning tool that many people don’t even think of is the 1031 exchange. In this article, we’re going to talk about how to rethink your tax considerations when planning for retirement.

Tax Considerations

One of the biggest factors involved in retirement planning is taxes. You want to prepare yourself for retirement in the most tax-advantageous way possible. There are a lot of strategies that should be discussed with your financial planner, CPA, or tax advisor.

Consider How a 1031 Exchange Might Fit Into Your Retirement Plan

A 1031 exchange can be a great retirement planning tool. If you currently own a management-intensive property that you don’t want to deal with in retirement, a 1031 exchange allows you to sell that property and acquire another one while deferring your capital gains taxes. As a result, you can exchange your management-intensive property for a property that provides more hassle-free passive income.

Set up Your Like-Kind Exchange

Engaging in a 1031 exchange, rather than an outright sale, of your real estate can help you avoid a huge capital gains tax windfall. While every taxpayer can avail themselves of the tax-saving benefits of a 1031 exchange, the exchange process is complicated and requires the help of a pro. That’s where the qualified intermediaries at Commercial Partners Exchange Company come in. We have more than two decades of experience facilitating 1031 transactions for clients in Minnesota and across the United States. Contact us today for help setting up your like-kind exchange.

  • Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

 

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved

Qualified Opportunity Fund – Advantages vs. Disadvantages

Qualified Opportunity Fund

Qualified opportunity funds exist as an alternative method for deferring capital gains taxes. QOFs were created by Congress to encourage investors to move their money into economically challenged areas. In this article, we are going to talk about the advantages and the disadvantages of qualified opportunity funds.

Advantages of Qualified Opportunity Funds

Qualified opportunity funds offer investors the ability to defer capital gains taxes on the sale of real estate, businesses, stocks, etc. by moving those gains into a qualified opportunity fund. If you hold your investment for 5 years, 10% of your gains will be forgiven. If you hold your investment for 7 years, another 5% of your gains will be forgiven.

Disadvantages of Qualified Opportunity Funds

The biggest disadvantage of a qualified opportunity fund is the looming deadline of 2026. Barring any future changes, any tax-deferral you have availed yourself of in a qualified opportunity zone will come due on December 31, 2026. As a result, it may be more advantageous to defer your capital gains taxes in a 1031 exchange, which has no hard deadline. With 1031 exchanges you can theoretically continue exchanging into new replacement property and defer your taxes indefinitely.

Minneapolis Like-Kind Exchanges

If you’re searching for an experienced, reputable company to handle your like-kind exchange of real estate, you’ve come to the right place! Commercial Partners Exchange Company has been facilitating real estate exchanges for more than twenty years. Our qualified intermediaries can help you through every stage of the 1031 process – answering your questions and advising you each step of the way. Contact us today at our Minneapolis office to learn more about our services and discuss the details of your real estate exchange.

  • Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

 

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved

 

Can Co-Ops Be Exchanged Under Section 1031?

Co-Op 1031 Exchange

There have been a lot of changes to section 1031 over the past year or so. With these changes come a lot of questions. In this article, we will discuss whether co-ops can be exchanged under section 1031 of the Internal Revenue Code.

Tax Law Changes

With the implementation of the Tax Cuts & Jobs Act in 2018, there were a lot of changes to the 1031 exchange landscape. Most notably, 1031 exchanges were narrowed to only real estate – personal property exchanges were excluded from eligibility.

With these changes in mind, do co-ops qualify for 1031 exchange tax treatment?

Co-Ops & 1031 Exchanges

The short answer is yes – co-ops can qualify for 1031 exchange treatment. The IRS has issued a ruling that co-ops are eligible for 1031 exchange because they are to be treated as real estate. This means you can exchange co-op stock in a 1031 transaction, and interest in a co-op can be treated like interest in real property.

Get Help With Your 1031 Exchange

If you’re thinking about deferring taxes with a 1031 exchange, get professional assistance from a qualified intermediary to ensure the success of your exchange. The qualified intermediaries at Commercial Partners Exchange Company have two decades of experience helping clients throughout the country on their real estate exchanges. We work with you from the start of your exchange all the way through to closing. Give us a call today to talk about the details of your real estate exchange. You can find us at our primary office in downtown Minneapolis.

  • Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

 

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved

Can You do a 1031 Exchange of Foreclosed Property?

Foreclosure 1031 Exchange

If you are facing foreclosure on a property you own, you may be able to exchange the property and defer the capital gains taxes under section 1031 of the Internal Revenue Code. In this article, we are going to discuss whether or not you can complete a 1031 exchange of foreclosed property.

What is Your Gain on the Sale?

When facing foreclosure, it’s important to determine your gain on the sale. Remember, your gain on the sale is not the amount of cash proceeds that you may (or may not) receive. Rather, the gain is determined by calculating the difference between your adjusted basis in the property and the debt relief you will experience upon giving the property back to the lender. If your debt in the property is far above your basis, you may actually have a taxable gain on the property if you give it back to the lender.

1031 Exchange

If you find yourself in this situation, it may be better to conduct a 1031 exchange on your property in order to defer your capital gains taxes. The difficult part is that you will likely need to come up with a good amount of cash for a down payment on a replacement property. In any case, a qualified intermediary can help you determine what the best option is for you.

Like-Kind Exchange Intermediaries

At Commercial Partners Exchange Company, we provide like-kind exchange intermediary services to clients throughout the state of Minnesota and around the United States. Our qualified intermediaries have over twenty years of experience facilitating all types of exchanges under section 1031 of the Internal Revenue Code. We bring that level of experience to the closing table with each transaction we facilitate so you can rest assured that your exchange is in good hands. Reach out to our qualified intermediaries today at our downtown Minneapolis office to chat about your exchange.

  • Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

 

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved

 

Determining the Tax Owner in a 1031 Exchange of Real Estate

Tax Owner 1031 Exchange

As we’ve discussed before, in a 1031 exchange the same tax owner who sells the relinquished property must also acquire the replacement property. This is one of the most important rules in a 1031 exchange. But what if you want to sell a property you own individually and acquire the new replacement property as part of an LLC? This is where things get tricky. In this article, we are going to discuss the importance of determining the “tax owner” in a 1031 exchange of real estate.

Who is the Tax Owner?

When it comes to 1031 exchanges, the tax owner is the person (or entity) that has the benefits and burdens of ownership. Often the tax owner typically files tax returns for the property and appears on the deed as the title owner of the property. However, that is not always the case. Sometimes the deed will list a disregarded entity as the owner on the deed. Remember, a disregarded entity is an entity (typically an LLC or other business) that is disregarded for federal tax purposes.

The important thing to note is that the tax owner of the property needs to be the same on both the relinquished property and the replacement property in order for the 1031 exchange to be a success.

Real Estate Exchanges

Considering a like-kind exchange of real estate under section 1031 of the Internal Revenue Code? You’ve come to the right place! At Commercial Partners Exchange Company, we have over two decades of experience facilitating exchanges of real property for our clients. Our qualified intermediaries can help you identify replacement property and prepare your documents for closing. Contact us today at our offices in downtown Minneapolis to chat with one of our intermediaries about the tax-saving benefits of a 1031 exchange!

  • Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

 

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved