In this article, we are going to walk through four essential steps to conducting a successful like-kind exchange of real estate.
Include a 1031 Exchange Clause in Your Purchase Agreement
When you enter into a purchase agreement for a property, it’s a great idea to include a 1031 exchange clause stating that you intend to use the property in question in a 1031 exchange.
Contact a Qualified Intermediary
Early on in the process, reach out to a qualified intermediary (like CPEC1031, LLC) who can help you navigate the process successfully.
Sell Your Property While Avoiding Boot
To officially begin the 1031 exchange process, you need to sell your relinquished property. When you do this, it’s important to remember to avoid receiving any taxable “boot.” Most often, boot comes in the form of cash. Keep your hands off your cash proceeds during the process if you want to defer all of your capital gains taxes.
Remember Your Deadlines
Don’t forget that 1031 exchanges are governed by strict deadlines. Once you sell your relinquished property, you have just 180 days to complete your like-kind exchange. The first 45 days of that 180 day period are set aside as your “identification period” – the time during which you must identify in writing your replacement properties. If you miss any of these deadlines, your exchange will fail so it’s essential to be aware of these at all times.
1031 Exchange Help For Those Who Need It
At CPEC1031, LLC we offer 1031 exchange help for those who need it. No matter what your situation – whether you’re exchanging a large commercial property, a small rental property, or something in between – we are here to help! With over two decades of experience, of qualified intermediaries have the knowledge and the expertise needed to help you defer 100% of your capital gains tax burden. Let us help you through the 1031 exchange process from start to finish. Contact us at our downtown Minneapolis offices to learn more about our team and how we can help.
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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