A 1031 Exchange Like-Kind Property Scorecard

Before you start looking for 1031 exchange replacement property, it’s important to have a good grasp of your numbers.

A simple 1031 exchange scorecard can help you understand your value, equity, debt, basis and potential tax exposure before the sale of your relinquished property.

Know the numbers before you choose your replacement property:

1. Know the Property. This includes the sale date, ownership, and value.

2. Know the Numbers. This includes the transaction costs, debt, and adjusted basis.

3. Know the Tax Exposure. This includes depreciation recapture, capital gains, NIIT, and state tax.

4. Know Your 1031 Exchange Targets. This includes value (replacement property value), equity (net proceeds to reinvest), and debt (debt to replace or offset with cash.

Understanding these numbers gives you a much clearer picture of what you may need to replace to maximize tax deferral.

Remember, good 1031 exchange planning starts prior to closing. Before you choose replacement property, know the numbers you are trying to replace!

Find a 1031 Intermediary Near You

Find a qualified intermediary for your 1031 exchange by contacting CPEC1031, LLC. Our intermediaries have been facilitating like-kind exchanges under section 1031 of the Internal Revenue Code for more than twenty years. We can help guide you through every stage of the 1031 exchange process from beginning to end. No matter what type of exchange you are doing or where your property is located, we can help ensure your 1031 exchange is a success. Contact us today at our Minneapolis office to learn more about the benefits of a 1031 exchange of real estate.

• 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.

© 2026 Copyright Jeffrey R. Peterson All Rights Reserved

The 1031 Exchange Exit Plan for Underperforming Property

Are you holding an underperforming property because you are afraid of the potential tax bill that would come with a sale? A 1031 exchange may give you another exit path.

The Tax-Saving Benefits of Section 1031

Section 1031 of the Internal Revenue Code offers excellent tax-saving benefits for owners of investment or business property. If you sell your investment property and reinvest the sales proceeds into a replacement property (rather than pocketing the net proceeds), you can defer your capital gains tax burden on the sale of that property.

Many investors utilize this 1031 exchange strategy when they are holding onto an underperforming property that they want to get out of. Rather than selling the property in an outright sale (and recognizing the taxable gains that come with such a sale), why not exchange your property for a replacement property of equal or greater value, equity, and debt and defer your capital gains taxes in the process?

For many investors, this is a no-brainer.

1031 Exchange Your Investment Property

1031 exchange your investment property and defer your capital gains tax burden. Section 1031 of the Internal Revenue Code can be utilized by all US taxpayers, from big time investors, to small mom-and-pop shops. Contact CPEC1031, LLC today to talk through the details of your next 1031 exchange. We can answer any questions you have, prepare your documents, and help you navigate the like-kind exchange process from the sale of your relinquished property to the closing of your replacement property. Our team has over 20 years of experience in the 1031 exchange industry. Let us help you through your next 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.

© 2026 Copyright Jeffrey R. Peterson All Rights Reserved

Converting Property Ownership to TIC Interest Before Doing a 1031 Exchange

A client recently brought up an important question about 1031 exchange transactions. They asked:

“Can we convert our ownership to tenant-in-common (TIC) interests so each of us can do our own 1031 exchange when the property sells?”

In some situations, the answer is yes. However, the bigger point is that TIC ownership is only one of several ways to create flexibility when co-owners may want different exit strategies.

Depending on the ownership structure, financing, timing, and each owner’s goals, there may be several approaches to consider, and each approach comes with different tax, financing, control, and administrative implications. That is why these conversations are best had years before a contemplated sale and not weeks before closing.

1031 exchange flexibility depends on planning long before the closing of your relinquished property. Co-owners generally have three options:

1. Separate before the sale.

2. Restructure ownership.

3. Exchange first, separate later.

As always, the specific facts matter, and tax and legal advisors should be involved in evaluating the alternatives.

Contact an Experienced 1031 Intermediary at CPEC1031, LLC

If you are considering a 1031 exchange of investment real estate, contact a qualified intermediary early in the process. A skilled intermediary can help guide you through the 1031 exchange process and ensure you don’t fall into any potential traps for the unwary. CPEC1031, LLC has been working in the 1031 exchange industry for more than twenty years. Let our team assist you throughout the like-kind exchange process. We are standing by and ready to put our experience to work on your next 1031 exchange. Contact our team today to learn more about the 1031 exchange process and see if your property qualifies for 1031 treatment.

• 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.

© 2026 Copyright Jeffrey R. Peterson All Rights Reserved

Selling Real Estate After Converting From C-Corp to S-Corp? Check the Calendar First

If you have converted from a C corporation to an S corporation it’s important to check the calendar before you sell appreciated real estate.

IRC section 1374 generally creates a five-year recognition period during which pre-conversion built-in gain can still trigger a corporate-level tax. However, selling isn't your only option. A 1031 exchange may provide another path for appreciated real estate.

For qualifying real estate, a 1031 exchange may allow the S corporation to reposition the real property without recognizing that gain today. The built-in gain then carries into the new replacement property through the remaining recognition period.

Before you sell your property, know when the S-corp election became effective. A 1031 exchange may give you another path.

As always, it’s important to work closely with your tax advisor (CPA or accountant) throughout your 1031 exchange. Doing so will set you up for a successful, tax-deferred exchange and help you avoid any avoidable pitfalls that could derail your exchange.

Section 1031 – Your Ticket to Tax Deferral

Section 1031 of the Internal Revenue Code is your ticket to capital gains tax deferral. With a 1031 exchange, you can sell a relinquished property, reinvest your proceeds into a replacement property, and defer your capital gains taxes in the process. At CPEC1031, LLC we have decades of experience facilitating like-kind exchanges in Minnesota and across the United States. Let us help you through the ins and outs of the 1031 exchange process. We can answer your questions, help prepare documentation, and make sure you are well positioned to defer 100% of your capital gains tax burden.

• 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.

© 2026 Copyright Jeffrey R. Peterson All Rights Reserved

Does Seller Financing Rule Out a 1031 Exchange?

Many taxpayers ask the question: if my transaction involves seller financing, does that rule of the option of doing a 1031 exchange?

The short answer is: not necessarily.

If you sell investment real estate and agree to receive part of the purchase price over time through a promissory note or installment arrangement, a 1031 exchange may still be possible. However, this situation may complicate the exchange because the seller typically wants to reinvest all of the equity into the replacement property to maximize their capital gains tax deferral.

The good news is a 1031 exchange isn’t an all or nothing game. Depending on the numbers, a partial tax-deferred exchange may still be an option. Or, a seller may be able to bring additional cash to the replacement purchase to make up the shortfall and pursue full tax deferral.

The key is to run the numbers prior to closing and involve your tax advisor early in the process to avoid any potential issues.

Get Help Throughout the 1031 Exchange Process

Section 1031 of the Internal Revenue Code is available for all US taxpayers to take advantage of. With it, you can defer capital gains taxes on the sale of qualifying real estate as long as you redeploy your net proceeds into a replacement property of equal or greater value. Work with a qualified intermediary from CPEC1031, LLC on your next exchange of like-kind property and start deferring your capital gains taxes today. Contact us at our Minneapolis office to learn more about the benefits of section 1031 and see how we can help you through the 1031 exchange process.

• 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.

© 2026 Copyright Jeffrey R. Peterson All Rights Reserved