Before you start looking for 1031 exchange replacement property, it’s important to have a good grasp of your numbers.
A simple 1031 exchange scorecard can help you understand your value, equity, debt, basis and potential tax exposure before the sale of your relinquished property.
Know the numbers before you choose your replacement property:
Know the Property. This includes the sale date, ownership, and value.
Know the Numbers. This includes the transaction costs, debt, and adjusted basis.
Know the Tax Exposure. This includes depreciation recapture, capital gains, NIIT, and state tax.
Know Your 1031 Exchange Targets. This includes value (replacement property value), equity (net proceeds to reinvest), and debt (debt to replace or offset with cash.
Understanding these numbers gives you a much clearer picture of what you may need to replace to maximize tax deferral.
Remember, good 1031 exchange planning starts prior to closing. Before you choose replacement property, know the numbers you are trying to replace!
Find a 1031 Intermediary Near You
Find a qualified intermediary for your 1031 exchange by contacting CPEC1031, LLC. Our intermediaries have been facilitating like-kind exchanges under section 1031 of the Internal Revenue Code for more than twenty years. We can help guide you through every stage of the 1031 exchange process from beginning to end. No matter what type of exchange you are doing or where your property is located, we can help ensure your 1031 exchange is a success. Contact us today at our Minneapolis office to learn more about the benefits of a 1031 exchange of 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.
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