In order to complete a 1031 exchange, the replacement property must be properly identified within the 45 day identification period. If the property is not identified within that timeframe, you are SOL (Statutorily Out of Luck).
Knowing that you have those restrictions in place, you could identify some “backup” properties using the three-property identification rule to give yourself a little wiggle room in case one of the properties falls through.
This also illustrates the importance of preparedness in a 1031 exchange. Like-kind exchanges are governed by strict rules and regulations and there are many things that can go wrong during the process. It’s important to give yourself enough time to set everything up properly and account for potential pitfalls so you can give yourself the best shot at 100% tax deferral.
1031 Exchange Company in Minnesota
CPEC1031, LLC is a Minnesota-based like-kind exchange company that facilitates exchanges under section 1031 of the Internal Revenue Code. Our team of qualified intermediaries is here to help you through all the unique details of your 1031 exchange of investment or business real estate. Contact our like-kind exchange professionals today to learn more about the 1031 exchange process and find out if your property qualifies for 1031 exchange tax-deferral. You can reach us at our Twin Cities office, located 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.
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