The ultimate goal of most 1031 exchanges is 100% capital gains tax deferral on the sale of qualifying property. Unfortunately, due to a variety of potential pitfalls, sometimes taxpayers are only able to defer part of their gain. In this article, we are going to talk about a few strategies you can employ to help ensure 100% tax deferral during your 1031 exchange.
Keep an Eye on Your Value, Equity & Debt
In a 1031 exchange, you ideally want to exchange into a replacement property that’s bigger and better than your relinquished property. To that end, it’s important to keep an eye on your value, equity, and debt when looking for a replacement property. If you want to defer 100% of your gains, make sure your replacement property is equal to or greater than your relinquished property in all three of these categories (value, equity, and debt).
Don’t Miss Your Deadlines
The 180 day exchange period is a strict time frame. If you do not complete your 1031 exchange within this time period, your exchange will fail and you won’t be able to defer any of your gains. It’s important to plan ahead and work with a qualified intermediary who can help set you up for success.
Contact a Minnesota Like-Kind Exchange Company
Contact Minnesota like-kind exchange company, CPEC1031, LLC today for help with your next 1031 exchange of real property. Our qualified intermediaries have decades of experience working with taxpayers on all types of 1031 exchanges. You can find us at our primary office in downtown Minneapolis. We work with clients throughout the entire state of Minnesota, as well as the United States at large. No matter where your transaction is taking place, we can help you defer capital gains taxes. Give us a call today to get started!
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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