Real Estate

What CPAs Should Know About Qualified Opportunity Zones

CPAs Qualified Opportunity Zones

CPAs are always on the lookout for new tax-saving avenues that they can share with their clients. The new kid on the block is the qualified opportunity zone. In this article, we are going to explain what CPAs should know about qualified opportunity zones.

How Qualified Opportunity Zones Work

Qualified opportunity zones are a recent tax tool that allow investors to defer capital gains taxes when selling property. The catch is that you have to reinvest your capital from the sale into a “qualified opportunity zone” as defined by the governor of the state in which you are investing the funds. The important thing to remember here is that these taxes will come due on December 31, 2026.

1031 Exchange is Often a Better Option

Compared to the new qualified opportunity zones, 1031 exchanges are often a more tax-efficient option. The biggest difference between a qualified opportunity zone and a 1031 exchange is that there is no set date at which all capital gains taxes become due.

With a 1031 exchange you can defer your gains indefinitely by continuing to exchange into bigger and better properties – thus keeping your money hard at work for you as time goes by.

Get Help with Your Real Estate Exchange

If you’re looking for help with your 1031 exchange, you’ve come to the right place! Commercial Partners Exchange Company offers a full range of 1031 exchange services. Our qualified intermediaries can take the reigns of your exchange and ensure that everything goes off without issue. We’ll make sure you are fully prepared for the closing table. Contact us today to set up a time to chat with one of our 1031 exchange professionals about your real estate exchange. You can find us at our offices 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.

 

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved

 

 

Can I do a 1031 Exchange on a Sale of Stocks & Use the Proceeds to Purchase Real Estate?

1031 Exchange of Real Estate

This is a common question when it comes to 1031 exchanges. Let’s dive right into it…

1031 Exchanges are for Real Estate

1031 is only for real estate exchanges. You cannot do a 1031 exchange with stocks. You could, however, use the new qualified opportunity zone legislation that was passed as part the tax reform (and not simplification) to reinvest those stock gains in a opportunity zone fund. Deferral is only until 12-31-2026, but up to 15% of those gains may be forgiven if you hold the investment for seven years (10% for the first 5 + 5 % for the next 2) before 12-31-2026. With that in mind, you ideally need to invest within 2019 and then the gain on the appreciation on the investment within the opportunity zone fund is excluded if you hold for at least a total of 10 years and sell before 2047. 

Read more at this link: Designated Census Tracts for Opportunity Zones.

  • 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.

 

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved

How to Profit from Real Estate while Deferring Taxes

Profit from Real Estate

Investing in real estate can be very profitable, but that’s not a guarantee. You need to understand the market, know when to sell / buy, and much more. One of the best tools in a real estate investors arsenal is the 1031 exchange. In this article, we are going to discuss how to profit from real estate while simultaneously deferring taxes with a 1031 exchange.

The Purpose of Section 1031

The purpose of section 1031 of the Internal Revenue Code is to incentivize real estate investors to continue investing their money in the market (thus leading to overall economic growth as a result). There is also a direct benefit to the taxpayer conducting the 1031 exchange in that they are able to defer their capital gains taxes on the real estate sale and keep their money building wealth in a continuing investment.

The next time you’re thinking about selling a piece of real property – consider a 1031 exchange first. As long as you meet all the benchmarks, you can defer your taxes and keep your profits working for you in a bigger, better property.

Save Money on Your Next Real Estate Transaction

If you are looking to save money on your next real estate transaction, consider a 1031 exchange to defer your capital gains taxes. With more than 20 years of experience under our belts, our qualified intermediaries have the resources to ensure that your exchange goes off without a hitch. We can prepare all of your 1031 documents and answer any questions you might have. Contact our intermediaries today at our downtown Minneapolis office to get your exchange up and running.

  •  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.

 

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

 

Tips for Reinvesting Real Estate Returns

Reinvesting Real Estate

Reinvesting your real estate returns is easy with section 1031 of the Internal Revenue Code. In this article, we are going to offer up some tips for reinvesting your real estate returns using a 1031 exchange.

Defer Taxes Indefinitely

The beauty of a 1031 exchange is that, when done properly, you can defer your capital gains taxes indefinitely by continually reinvesting the sales proceeds into new replacement property. This allows you to keep your money working for you in a continued investment, compounding wealth over time rather than cutting a check to the government.

Always Trade Up

One important thing to keep in mind when exchanging like-kind property is that you always want to trade up when it comes to your replacement property. That means your replacement property needs to be equal to or greater than your relinquished property in value, equity, and debt. In order to defer 100% of your gains, you need to be sure to satisfy these requirements.

Be Mindful of Your Timing

1031 exchanges are governed by strict time lines. Be sure you meet the necessary deadlines or your exchange will fail.

1031 Exchange Resources

If you need help with your 1031 exchange, let the professionals at Commercial Partners Exchange Company help. Our qualified intermediaries have two decades of experience assisting clients with their real estate exchanges under section 1031 of the Internal Revenue Code. We can help advise you throughout the process, prepare your documentation, and answer all of your questions. Contact us today at our downtown Minneapolis office to learn more about our services and get started with your very own 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.

 

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

When to Involve a Real Estate Attorney in your 1031 Exchange

Real Estate Attorney

There are a lot of moving parts in a 1031 exchange and many players involved. Some taxpayers don’t know who to involve in their exchange. Should you involve your attorney? CPA? Financial planner? Someone else? In this article, we are going to discuss when it’s a good idea to involve a real estate attorney in the 1031 exchange process.

The Role of a Real Estate Attorney

There is a lot of complicated documentation that comes with any 1031 exchange. If you’re confused about any of it, your attorney can help clear things up. Your attorney can read through and help you understand purchase agreements, contracts, exchange documents, and closing documents that relate to your 1031 exchange.

Other Professionals

Your attorney is not the only professional you need on your 1031 exchange team. Far from it! Perhaps the most important person to have on your exchange team is a skilled qualified intermediary. This should be the point person throughout the exchange process. You should also consult with your CPA and financial planner to discuss the tax implications of the exchange and also how it will impact your portfolio.

Commercial Partners Exchange Company

At Commercial Partners Exchange Company, our intermediaries have twenty years of experience helping taxpayers defer capital gains taxes when selling real property. We can prepare your 1031 exchange documents, answer all of your questions, and advise you throughout your exchange. Get your 1031 exchange up and running today by calling our qualified intermediaries to start the process. With offices around the United States, we are fully equipped to facilitate your exchange, regardless of where your property is located.

  • 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.

 

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved