There are a lot of rules and regulations that you need to keep straight in order to complete a successful 1031 exchange. One issue that taxpayers often worry about in the course of a 1031 exchange is buying property from a related person. In this article, we are going to talk about some things to keep in mind when you’re buying 1031 exchange replacement property form a related person.
Buying 1031 Exchange Property from a Related Party
When you buy your replacement property you’d probably prefer to buy from the devil you know rather than the devil you don’t know. However, the IRS has created rules that make it more difficult to buy 1031 exchange property from a related person. This is particularly true if you’re buying your replacement property from a related person.
Many farmers want to buy the property that’s adjacent to their home farm but the owner of the adjacent farm may be a family member. It often doesn’t make sense for a farmer to buy new property miles away, so they may have no choice but to purchase property form a related party.
1031 Exchange Team of Professionals
It’s important to surround yourself with the best and brightest professionals when embarking on a 1031 exchange. Make sure your accountant, lawyer, and qualified intermediary are in communication with each other so they can help guide you in the right direction throughout the course of your 1031 exchange. Contact CPEC1031, LLC today for help with your next 1031 exchange involving related parties. We have the skills and experience needed to guide you through the entire process.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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