1031 Exchange

The Process of Deferring Capital Gains Taxes with a 1031 Exchange

The biggest draw of a 1031 exchange is the potential of deferring your capital gains tax burden when selling investment or business real estate. But many people don’t know how the capital gains tax deferral process works. In this article, we outline the process of deferring capital gains taxes with a forward 1031 exchange of real estate.

Step 1: Selling Your Relinquished Property

Before we dive in, we should note that these are the typical steps of a forward 1031 exchange. Other types of exchanges (reverse, build-to-suit) work a little differently.

In a forward exchange, the first step in the process is the sale of your relinquished property. Once you sell your relinquished property, your 1031 exchange clock starts ticking. You have a total of 180 days to complete your like-kind exchange.

Step 2: Identifying Your Replacement Property

The next step in the process is to provide written identification of your replacement property within 45 days. If you don’t identify a property during this period, you will not be able to exchange into it.

Step 3: Acquiring Your Replacement Property

By the 180th day of your exchange period, you must acquire your identified replacement property. If all goes smoothly, you will then be able to defer your capital gains taxes on the sales proceeds.

Start Deferring Your Capital Gains Taxes Today

Start deferring your capital gains tax burden today by conducting a 1031 exchange of your investment real estate. The 1031 exchange can be utilized by investors big and small to defer capital gains taxes on the sale of real property held for business or investment use. For more information on section 1031 of the Internal Revenue Code and to see if your property qualifies, contact the team at CPEC1031, LLC. Our qualified intermediaries have more than twenty years of experience working with taxpayers across the United States on their 1031 exchanges. Let us help you through the 1031 exchange process.

  • 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

3 Benefits of Working with a Skilled Intermediary on Your 1031 Exchange

Many people are unaware of the true benefits of working with a qualified intermediary during a 1031 exchange. In this article, we are going to talk about the benefits of working with a skilled intermediary during the 1031 exchange process.

Your Questions, Answered

A good qualified intermediary is well-versed in the intricacies of the 1031 exchange process. If you have questions (which you no doubt will) at any point before, during, or after your 1031 exchange, a qualified intermediary can answer those questions so you can make informed decisions each step of the way.

Document Preparation

There are a variety of documents that need to be prepared and furnished throughout the 1031 exchange process. A qualified intermediary can help prepare all of these documents so you have everything you need throughout the process.

Working with Your Other Advisors

There are a number of different professionals you need to engage with during a 1031 exchange – your realtor, your banker, your CPA, etc. A qualified intermediary can work closely with each of these advisors to ensure the exchange progresses smoothly.

Work with a Qualified Intermediary at CPEC1031, LLC

Work with one of the experienced qualified intermediaries at CPEC1031, LLC on your next like-kind exchange under section 1031. When structured properly, a 1031 exchange allows you to defer your capital gains taxes and compound your wealth through a replacement investment property. Working with a qualified intermediary is the best way to set your 1031 exchange up for success. Reach out to CPEC1031, LLC today at our Minneapolis office to discuss next like-kind exchange under section 1031.

  • 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

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Video – Making Downtown Minneapolis Business Positive

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I talked to one of the heads of one of the largest banks in the country and described some of the real estate problems we’re having in Minneapolis. Many people are working remotely and employers are not forcing workers to come back to downtown offices. This banker explained that Minneapolis is not alone in these issues (such as Chicago). We’re currently seeing an adjustment during which there will be buying opportunities for people who can re-envision what properties can be. Ultimately, downtown Minneapolis needs to become a more business positive area.

Get Started with Your Next 1031 Exchange

Want to learn more about how you can save money in deferred capital gains taxes with a 1031 exchange? You’ve come to the right place! CPEC1031, LLC has everything you need to ensure the success of your next like-kind exchange of investment real estate. We have helped countless taxpayers through the ropes of the 1031 exchange process. Let us handle the details of your exchange so you don’t have to! Contact us today at our Minneapolis office to learn more about the exchange process and get started with 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 Should You Consider a Zero-Coupon DST in a 1031 Exchange?

In a 1031 exchange, 100% capital gains tax deferral typically comes down to three key elements:

  1. Value

  2. Equity

  3. Debt

A 1031 exchange of real estate is not just about finding the right replacement property, it is about continuing the investment in a way that accounts for value, equity, and debt. To that end, in order to defer 100% of your capital gains tax burden, you need to:

  • Buy replacement property that is up or equal in value to the relinquished property

  • Reinvest all equity and net proceeds

  • Replace debt or add cash to offset debt relief as needed

The debt piece is often where planning gets complicated. A zero-coupon DST may help solve the debt piece of this puzzle. A zero-coupon DST can be one tool used to help offset debt from the sale of a heavily encumbered real property.

How a 1031 Exchange can Help You Save in Capital Gains Taxes

A 1031 exchange can help you save money in capital gains taxes when you reinvest your sales proceeds into a replacement property of equal or greater value, equity, and debt. The 1031 exchange is a tool available to all United States taxpayers. No matter where you are in the country, or how big or small your property is, you may be a good candidate for 1031 exchange tax deferral. Contact a qualified intermediary at CPEC1031, LLC to learn more about the 1031 exchange process and see how we can help you through the ins and outs of the like-kind exchange process.

  • 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

Why It’s Essential to Involve Your CPA or Accountant in Your 1031 Exchange

A successful 1031 exchange requires the cooperation of a number of different professionals: a qualified intermediary, a real estate broker, a banker, and a CPA/accountant. In this article, we are going to discuss why it’s essential to involve your CPA or accountant in your 1031 exchange.

Your CPA’s Role in the 1031 Exchange Process

Your CPA or accountant knows your personal tax situation better than anyone else. As a result, they are best equipped to tell you how a 1031 exchange may impact your tax situation and whether or not a like-kind exchange is even a good idea for you.

In addition to that, there are specific requirements for reporting a 1031 exchange to the IRS. While your qualified intermediary can keep you informed of these requirements and help with document preparation, your CPA is the one who will actually need to file the required documents and potentially request a filing extension if needed.

Keep Your Money Working For You With a 1031 Exchange

A 1031 exchange of investment or business real estate can help you save money in capital gains taxes and keep your hard-earned money working for you in a continuation of your original investment. Work with a qualified intermediary who knows the ins and outs of the 1031 exchange process to set yourself up for 100% capital gains tax deferral. CPEC1031, LLC is standing by to help you through all the details of your next 1031 exchange of real property. Reach out to our team today to set up a time to chat about 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

 

Defer the tax. MAXIMIZE your gain.

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