In a 1031 exchange, people sometimes let the tax tail wag the dog, letting tax factors drive their decision making. This can lead to disastrous situations. If you have a client thinking about doing a 1031 exchange, how can you offer strategies to your client to make the 1031 exchange identification process less stressful?
Recently, we have been seeing more and more clients locking up their replacement property with a purchase agreement or option agreement so they have a sure-thing to go into. This is a great strategy if you can find a patient seller that’s willing to let you tie them up with a contract.
Another strategy is a reverse 1031 exchange. Let’s say that you approach a supposedly patient seller and they tell you they want to close as soon as possible. In that scenario, you can do a reverse 1031 exchange and have your qualified intermediary act as your surrogate purchaser to buy the replacement property. Under the safe harbor, the intermediary can hold that property as the buyer’s strawman for up to 180 days to allow you the time to offload your relinquished property. As soon as you’ve sold your relinquished property we then take the proceeds off the shelf and transfer it to the buyer to complete the exchange.
Contact a 1031 Exchange Company
Contact a 1031 exchange company today to get the ball rolling on your like-kind exchange tax deferral. At CPEC1031, LLC we have decades of experience in the 1031 exchange industry. We can help you navigate all of the avenues of the like-kind exchange process from beginning to end. Reach out to our team of 1031 professionals to learn more about the benefits of 1031 tax deferral and the benefits available to you. Find us at our primary offices, located in Minneapolis. We work with clients on 1031 exchanges across 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.
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