When to Involve a Real Estate Attorney in your 1031 Exchange

 Real Estate Attorney

There are a lot of moving parts in a 1031 exchange and many players involved. Some taxpayers don’t know who to involve in their exchange. Should you involve your attorney? CPA? Financial planner? Someone else? In this article, we are going to discuss when it’s a good idea to involve a real estate attorney in the 1031 exchange process.

The Role of a Real Estate Attorney

There is a lot of complicated documentation that comes with any 1031 exchange. If you’re confused about any of it, your attorney can help clear things up. Your attorney can read through and help you understand purchase agreements, contracts, exchange documents, and closing documents that relate to your 1031 exchange.

Other Professionals

Your attorney is not the only professional you need on your 1031 exchange team. Far from it! Perhaps the most important person to have on your exchange team is a skilled qualified intermediary. This should be the point person throughout the exchange process. You should also consult with your CPA and financial planner to discuss the tax implications of the exchange and also how it will impact your portfolio.

Commercial Partners Exchange Company

At Commercial Partners Exchange Company, our intermediaries have twenty years of experience helping taxpayers defer capital gains taxes when selling real property. We can prepare your 1031 exchange documents, answer all of your questions, and advise you throughout your exchange. Get your 1031 exchange up and running today by calling our qualified intermediaries to start the process. With offices around the United States, we are fully equipped to facilitate your exchange, regardless of where your property is located.

  • 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.

 

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

Accounting Tips for a 1031 Exchange

 1031 Exchange Accounting Tips

There are many rules to keep in mind when it comes to 1031 exchanges of real property. In this article, we are going to offer up a few accounting tips to keep in mind for your next 1031 exchange of real estate.

3 Baseline Requirements

In terms of accounting, there are three baseline requirements you must satisfy in your 1031 exchange:

  • Value. Your replacement property needs to be of equal or greater value compared to your relinquished property in order to cover all of your gain.
  • Equity. All of your sales proceeds (equity) from the sale of your relinquished property need to be reinvested into your replacement property.
  • Debt. You need to offset any debt relief with new debt to make sure that evens out. You can also invest additional cash to offset debt relief.

It’s also important to avoid seller-backed financing in a 1031 exchange. Such financing can trigger boot – which will be subject to capital gains tax. A qualified intermediary can help you navigate all of these rules and insulate you from receiving any gains or boot.

Exchanging into 1031 Property

At Commercial Partners Exchange Company, we have over two decades of experience helping individuals exchange their property in 1031 transactions. We can walk you through all the steps in your exchange – from the sale of your relinquished property to the acquisition of your replacement property. Give us a call today to speak with one of our 1031 exchange intermediaries and get your like-kind exchange in the works! Our primary office is located in downtown Minneapolis, but we have offices around the United States.

  • 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.

 

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

What are the Limits of a 1031 Construction Exchange?

 1031 Construction Exchange

A built-to-suit construction exchange is great because it allows you to construct improvements to your replacement property before exchanging into it. In this article, we are going to talk about the limits of a 1031 build-to-suit construction exchange.

Time Constraints

A build-to-suit construction exchange sounds incredible, but it is not free from restrictions. Just like any other 1031 exchange, a build-to-suit exchange needs to abide by the 180 day exchange period. That means you’ve only got 180 days total to complete your construction improvements and finish your exchange. Any improvements you want to make need to be finished within 180 days, so your options are limited by timing.

But don’t let that discourage you! While you may not be able to tear down and construct a whole new building, you likely have time to replace some flooring, put up some dry wall, or construct other minor improvements that can add up. This is also a great way to get your replacement property closer to your ideal property.

Minnesota Like-Kind Exchange Company

A like-kind exchange is a great way to defer taxes when selling real estate, and a qualified intermediary is the best person to have on your team when starting an exchange. The Commercial Partners Exchange Company intermediaries have twenty years of experience on their side and can walk you through each stage of your exchange. Get started with your 1031 exchange by contacting one of our qualified intermediaries today at our downtown Minneapolis offices or one of our other offices around the United States.

  • 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.

 

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

Exchanging 1031 Property Between Family Members

 1031 Exchange Family Members

Here’s a common question we get a lot – “Can you 1031 exchange property between family members?” In other words, can you sell your relinquished property to your brother, or acquire your replacement property from your mother? In this article, we are going to talk about 1031 exchanges between family members.

Related Parties

When it comes to exchanges between related parties, there are several rules set in place. The first rule is that any property involved in a related party 1031 exchange must be held for at least two years after an exchange.

In addition to that, related party exchanges cannot be structured to avoid an imposition of tax. This is where things get a little gray because it can be difficult to differentiate between the right and wrong way to defer taxes when selling real estate. The IRS has fought several cases on this topic and won, making things even more murky.

Ultimately, if you have any questions about the legitimacy of a related party exchange, contact a qualified intermediary to discuss your situation.

Begin the 1031 Exchange Process

A 1031 exchange allows you to defer a hefty capital gains tax bill when selling real estate – but only if you satisfy all the requirements. That’s where a 1031 exchange intermediary can help – by making sure you’ve got all your bases covered for your 1031 exchange. The qualified intermediaries at Commercial Partners Exchange Company have over two decades of experience working with clients on their 1031 exchanges. Our intermediaries can help guide you through the steps of your exchange of real property. Contact us today at our downtown Minneapolis office to get the ball rolling.

  • 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.

 

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

Tips for Keeping Your 1031 Exchange Funds Safe & Sound

 Exchange Funds Secure

In a 1031 exchange it’s important that you don’t receive any of the sales proceeds of your relinquished property. But how do you rest easy knowing that your money is safe? In this article, we are going to offer a few tips for ensuring that your 1031 exchange funds are safe and sound.

Don’t Co-Mingle Funds

Don’t allow your funds to be co-mingled with any other taxpayer’s funds. Set up a separate, segregated escrow account for your 1031 exchange funds. Make sure that this account is only going to be used for your funds, and make sure you know the account number. Make sure that your funds are not co-mingled with your intermediary’s operating account. Knowing that your funds are in a separate, segregated bank account with no other funds will give you piece of mind.

Dual-Signature Account

Another way to further secure your funds is to lock your money down in a dual-signature account. This account would require two signatures in order to release any funds. The first required signature would be the qualified intermediary’s – since they are the primary holder of the account. The second authorization signature would be your own.

St. Paul 1031 Exchange Company

Commercial Partners Exchange Company (CPEC1031) has two decades of experience working on 1031 exchanges. Our qualified intermediaries can help you through each stage of your 1031 transaction – from the sale of your relinquished property to the acquisition of your replacement property. We bring to the table the skills and experience needed to ensure your transaction is a success. Contact us today to set up an appointment with one of our intermediaries and get started with your like-kind exchange today!

  • 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.

 

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved