Your 1031 Exchange Guide for 2019

A new year brings new possibilities. If you’re thinking about selling a piece of real estate in 2019, you may want to consider a 1031 exchange instead of an outright sale. Doing so could save you a lot of money in taxes. This article will act as a brief guide to 1031 exchanges in 2019.

Remember the New Rules

2018 brought some significant changes to 1031 exchanges, as the Tax Cuts & Jobs Act went into effect. These new rules will remain in effect in 2019 so it’s important to keep them in mind. Most importantly, remember that you can only do 1031 exchanges of real property – personal property is no longer eligible for 1031 treatment.

Give Yourself Plenty of Lead Time

1031 exchanges can get very complicated very quickly. With so many moving parts and so much that can potentially go awry, it’s a good idea to give yourself as much lead time as possible. That means reaching out to a qualified intermediary before you sell your relinquished property. The earlier you start planning, the better.

Contact a Qualified Intermediary

If you’re thinking about doing a 1031 exchange contact CPEC1031 right away. With more than twenty years of experience, our intermediaries provide the highest level of service to our clients during their 1031 exchanges. We can help you through every step of the like-kind exchange process – filling out your paperwork for you, advising you on replacement property, and more! Contact us today to learn more about how we can help you save taxes on your next real estate sale. You can find us at our main office in downtown Minneapolis.

• 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

Timing Matters in a 1031 Exchange

Timing is everything in a 1031 exchange. In this article, we’re talking about the various timing issues that can potentially arise before, during, and after a 1031 exchange.

1031 Timelines

1031 exchanges are governed by strict timelines. You’ve got 180 days total to complete your 1031 exchange. The first 45 of those days are set aside as your identification period, in which you need to identify your replacement property.

If you go over these timelines, your exchange will fail and you will recognize your capital gains taxes. There are still options if you find yourself in this situation (DSTs being one option), but it’s best to avoid exceeding these time frames when possible.

Holding Periods

In addition to the 1031 exchange time periods, you also need to be cognizant of your timing after your complete your exchange. After you complete an exchange, you can’t just turn around and sell your new replacement property right away and reap the sales proceeds. The IRS would see this and invalidate your exchange.

As a general guideline, you want to hold onto your new replacement property for at least 2 years after your transaction before selling or exchanging again.

Save Money on Taxes

If you’re looking to save money on taxes when selling real estate, a 1031 exchange may be just the ticket! When you exchange property under section 1031, you can defer your capital gains taxes as long as you move your sales proceeds into a like-kind replacement property. A qualified intermediary can help you through each and every stage of the 1031 exchange process. Contact our intermediaries today to get a better sense of our services and how we can help you save money on taxes when selling real estate!

• 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

1031 Exchange Tips for Accountants

Many accountants and CPAs work with clients who are interested in 1031 exchanges. In this article, we are going to offer up a few 1031 exchange tips for accountants to help their clients when considering like-kind exchanges.

The Complexities of a 1031 Exchange

Most accountants and CPAs are not experts in the realm of 1031 exchanges. Like-kind exchanges, though they may seem simple, can be incredibly complex as there are a litany of rules and regulations you need to abide by. Many CPAs have a basic understanding of how 1031 exchanges work and can explain the benefits to their clients, but they can’t execute a 1031 exchange on behalf of their clients. That’s where a qualified intermediary becomes invaluable.

Partner with a Qualified Intermediary

If you are an accountant or CPA and your client is asking about doing a 1031 exchange, it’s important to refer them to a qualified intermediary who understands the ins and outs of the 1031 exchange process. We partner with many accountants and CPAs to offer 1031 exchange help to their clients as needed.

CPEC1031 in Minneapolis

At CPEC1031, our like-kind exchange professionals make it a point to give every 1031 exchange the attention it deserves. No matter what type of property you’re looking to exchange, we can advise you throughout the process so you feel comfortable and informed. Give us a call today to learn more about the like-kind exchange process and to get your exchange up and running. Our main office is located in downtown Minneapolis, but we work with clients throughout the country.

•  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

The Benefits of Tenancy-in-Common Property

Being a Tenant in Common (TIC) gives the opportunity to investors to diversify their real estate investments as it is allows the ability to invest in more larger properties, rather than smaller properties. This also gives the potential of Increase in the Net Cash Flow. Ownership in Tenants in Common (TIC) properties gives the chance to increase cash flow, provides tax write-offs as well as property appreciation benefits. It is accomplished without a time commitment of active property management that otherwise is required, as the sole owner of the property.

Benefits of Tenancy-in-Common

Tenants in Common (TIC) include some of the following benefits:

• The Scope for an Investment for larger properties.

• Purchasing investment properties as tenants in common (TIC) allows an investor to invest in a large amount of properties similar to warehouses, shopping centers, industrial property, etc. which generally will cost a few million or more.

• Allowing the diversifying of Real Estate Investments.

The Nation’s Leading Real Estate Companies have a source of investment properties and acquires a fixed rate, non-recourse financing with terms for Tenants In Common (TIC) owners. With the Tenants In Common (TIC) property investment, may gain the access to select, national real estate companies, who look for the investment properties for you. The companies can be referred to as TIC Identification companies and they generally provides extensive due diligence on the part of investors. These real estate companies, the lenders and the security companies conduct an extensive due diligence on the investment properties being offered to Tenants in Common (TIC). During the time and resources necessary are being provided in a scale far larger than the most individual investors are capable.

Tenants In Common (TIC) investment property locators use professional property and asset management teams to allow Tenant In Common (TIC) investors to have the benefits of real estate ownership, without the day-to-day property management.

CPEC1031

At CPEC1031, we specialize in 1031 exchanges of all shapes and sizes. Our team has been facilitating exchanges for taxpayers around the United States for more than two decades. We are well-equipped to work with you through every step of your exchange – from start to finish. Reach out to our intermediaries today to see if your property qualifies for a 1031 exchange. Our main office is located in downtown Minneapolis, but we have additional locations across the country.

• 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

1031 Delayed Exchange Explained

A 1031 delayed exchange represents a simple, strategic method for selling one qualified property and the subsequent acquisition of another property within a specific time frame for the deferral of capital gain taxes. Any property owner should consider a Delayed Exchange for the sale of their existing property. To do otherwise would necessitate the payment of capital gain taxes in amounts that can exceed 20% to 30%, depending on the appropriate combined federal and state tax rates.

It also provides exchangers with more flexibility and options in acquiring the replacement property than the simultaneous exchange. The delayed exchange begins when the exchanger's first relinquished property is sold and is completed when the last replacement property is acquired within the prescribed exchange period. There are two basic aspects to a Delayed Exchange. First, the purchase price of the Replacement Property must be equal to or greater than the sales price of the Relinquished Property. Secondly, all equity received from the sale of the Relinquished Property must be used to acquire the Replacement Property.

Several Steps in a 1031 Delayed Exchange

• STEP 1: List your exchange property for sale with a licensed real estate broker.

• STEP 2: Begin your search for replacement property.

• STEP 3: Open escrow on the exchange property being sold and complete the exchanged information sheet which was given to you.

• STEP 4: Provide written notification of the properties you wish to identify, not later than 45 days following close of escrow on the first property sold.

• STEP 5: Notify immediately as soon as you open escrow on your replacement property.

 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