When you are looking to sell real estate, you have a few options at your disposal. In this article, we are going to look at the differences between a 1031 exchange and a traditional sale – and the various benefits of each.
Traditional Real Estate Sale
In a traditional sale of real estate, the seller is paid the sales price of the property and is responsible for paying capital gains taxes on the net proceeds from the sale. This can add up to a sizable tax windfall and even deter people from selling their real estate at all.
1031 Exchange of Real Estate
A 1031 exchange allows the owner of real estate to defer these capital gains taxes by moving their net proceeds into a replacement property. This keeps your money working for you in a continued investment and helps you circumvent a potentially huge tax burden.
But remember, not all real estate can be used in a 1031 transaction. Only real estate that is held for investment or business purposes are eligible. That means you personal home or primary residence does not qualify.
Minnesota 1031 Exchange Company
Commercial Partners Exchange Company is a Minnesota-based 1031 exchange facilitator. We work with clients across the United States and help them defer their capital gains taxes when selling real estate. Our qualified intermediaries can help prepare all of your required documents, advise you on replacement properties, and answer any questions you have along the way. Reach out to our 1031 exchange professionals today to learn more about our like-kind exchange services and how we can help you save money on taxes.
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