1031 Exchange Related Party Rules

“Related party” may sound like a straightforward concept, but in a 1031 exchange, it can be anything but.

It’s easy to think of related parties as simply members of the same family. But Section 1031 takes a broader view, and those relationships can affect how an exchange is structured and whether special rules apply.

Certain transactions between related parties are subject to additional requirements, including rules that can come into play if the exchanged properties are disposed of within two years.

That makes one step especially important:

Understand the ownership relationships before structuring the exchange.

Ask yourself:

• Who actually owns the property?

• What individuals or entities sit behind those ownership interests?

• What relationships exist among the parties involved?

• Identifying a potential related-party issue early can help avoid surprises later.

Before the 1031 exchange is designed, understand who is connected to whom and how those connections may impact the transaction.

Qualified Intermediary Services in Minnesota

For qualified intermediary services in Minnesota and beyond, look no further than CPEC1031, LLC! Our team is comprised of experienced 1031 accommodators who have been facilitating 1031 exchanges of all types for decades. Let us guide you through the process and work hand-in-hand to achieve capital gains tax deferral. You can reach us at our Twin Cities office, which is located in the heart of downtown Minneapolis. Please feel free to reach out to our team of 1031 exchange professionals today to learn more about the process and get started!

• 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.

© 2026 Copyright Jeffrey R. Peterson All Rights Reserved

How 1031 Exchange Tax Deferral Can Be Part of a Larger Investment Strategy

A major benefit of a 1031 exchange is the potential to defer capital gains taxes when proceeds from the sale of qualifying investment real estate are reinvested into a replacement property according to IRS requirements.

A 1031 exchange can also be used as part of a larger investment strategy. For example, an investor could sell an existing commercial property and exchange into multifamily, industrial, office, or other qualifying investment (or business) real estate. The goal may be to reposition assets, diversify holdings, pursue different income opportunities, or acquire property that better aligns with changing investment objectives.

Because every transaction is different, it's important to evaluate the exchange structure, property qualifications, deadlines, and tax implications before proceeding. A qualified intermediary can help you set up your 1031 exchange strategy and work in tandem with your other advisors (your lawyer, CPA, real estate agent, etc.) to ensure the exchange is set up for success.

Take the Plunge with Section 1031

Take the plunge with section 1031 and start deferring your capital gains taxes on the sale of investment or business real estate. A 1031 exchange allows you to defer up to 100% of your capital gains tax burden so long as you reinvest your sales proceeds into a bigger replacement property. There are many rules and requirements when it comes to 1031 exchanges and it’s important to stay on top of things in order to ensure a successful exchange. The best way to do that is to work with a qualified intermediary throughout the process. Contact CPEC1031, LLC today to speak with our intermediaries and get started.

• 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.

© 2026 Copyright Jeffrey R. Peterson All Rights Reserved

How to Include a 1031 Exchange in Your Long-Term Estate Strategy

A 1031 exchange can be part of a long-term estate strategy, not just a one-time tax deferral. This is a benefit that not many taxpayers are fully aware of. In this article, we discuss how you can include 1031 exchanges in your long-term estate strategy.

The Long-Term Benefits of a 1031 Exchange

There’s nothing in the tax code or treasury regulations that says you can only do one 1031 exchange. Throughout your lifetime, you can do many like-kind exchanges if you so choose. In fact, this is a common strategy for savvy investors who continue to defer their capital gains taxes by conducting subsequent exchanges and reinvesting their proceeds into newer replacement properties. This leads to long-term compounded wealth.

Upon your death, your heirs receive your 1031 exchange property with a step-up in basis. This can leave your heirs with, not only inherited property, but an enviable tax situation upon your passing. For these reasons, many people include 1031 exchanges as a part of their long-term estate planning strategy.

Find a Qualified Intermediary for Your 1031 Exchange

Working with a qualified intermediary is one of the best ways to set yourself up for a successful 1031 exchange. A skilled intermediary can help you through the 1031 exchange process and make sure you are aware of the various rules and regulations that govern 1031 transactions. At CPEC1031, LLC our intermediaries have decades of experience working on 1031 transactions of all types. We can help you with your like-kind exchange regardless of where your property is located. Reach out today to set up a time to speak with our qualified intermediaries.

• 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.

© 2026 Copyright Jeffrey R. Peterson All Rights Reserved

How A 1031 Exchange Gives You Property Options

A 1031 exchange must be conducted with like-kind property. The good news is that “like-kind” is defined very broadly in the realm of 1031 exchanges. This means you have a lot of different options when choosing replacement property during your exchange. In this article, we are going to explain how a 1031 exchange gives you a plethora of options when it comes to real property.

Consider Your 1031 Replacement Property Options

When you sell a piece of like-kind real estate in a 1031 exchange, you don’t need to buy the exact same type of real estate as your replacement property, it just needs to be “like-kind” property. For example, if you are selling a management-intensive rental property, you don’t need to reinvest in another rental property. Instead, you can exchange into more passive real estate and still defer your capital gains taxes. This is a popular option for investors who are getting on in years and are approaching retirement. These savvy investors use 1031 exchanges as a part of their long-term retirement and estate planning strategy.

Let’s Talk About Your 1031 Exchange

At CPEC1031, LLC we focus exclusively on 1031 exchange transactions. Our qualified intermediaries are here to help you through all the ins and outs of the like-kind exchange process. We can help answer your questions, prepare your documents, and make sure you are set up to defer 100% of your capital gains tax burden when selling investment or business real estate. Contact us today at our Twin Cities office location in downtown Minneapolis to set up a time to chat with one of our intermediaries about your next 1031 exchange.

• 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.

© 2026 Copyright Jeffrey R. Peterson All Rights Reserved

When to Consider a Federal Tax Filing Extension for Your 1031 Exchange

1031 exchanges are governed by very strict rules and deadlines. Many people are unaware that your federal tax filing deadline can impact your 180 day timeline for your 1031 exchange. In this article, we discuss when you should consider a federal tax filing extension for your 1031 exchange.

How Your Tax Filing Deadline can Impact Your 1031 Exchange

You only have 180 days to complete your 1031 exchange. However, that deadline gets shortened if the due date for the filing of your federal tax return falls within that 180 day period. Depending on your specific situation, this can significantly decrease the amount of time you have to complete your exchange. Many taxpayers are unaware of this rule and are caught off guard.

To take full advantage of the 180 day time period, you may want to consider filing for an extension to keep your full exchange window intact. This is why it’s important to involve your tax preparer in the 1031 exchange process so they can plan accordingly.

Begin the Exchange Process with Your Investment or Business Property

Start your 1031 exchange by contacting the qualified intermediaries at CPEC1031, LLC. We have over two decades of experience facilitating exchanges of all designs (forward, reverse, built-to-suit, etc.) Our qualified intermediaries can help you through all the details of your next 1031 exchange, from beginning to end. Contact us today at our Twin Cities office, located in downtown Minneapolis, to begin the exchange process with your investment or business property. We are standing by and ready to help you through your next exchange.

• 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.

© 2026 Copyright Jeffrey R. Peterson All Rights Reserved