Video – Rethinking 1031 Exchanges of Farmland

The problem with farmland is that the cash-on-cash returns are not that lucrative. Institutional grade investment commercial real estate can provide an alternative because it offers a higher rate of yield, and a more steady and reliable source of income. Furthermore, if you purchase it through a DST (Delaware Statutory Trust) it’s a divisible asset that can be divided up amongst your heirs upon your passing with a stepped up basis.

Exchange Your Property with Section 1031

Defer your capital gains taxes when you exchange like-kind property for like-kind property under section 1031 of the Internal Revenue Code. At CPEC1031, our qualified intermediaries are here to help you navigate the 1031 exchange process from beginning to end. We have more than twenty years of experience facilitating transactions under section 1031 and can help ensure that you are set up for success. Contact us today at our Twin Cities office in downtown Minneapolis to learn more about the process and get your 1031 exchange 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

Video – What to Do When One Partner Doesn’t Want to Do a 1031 Exchange?

Sometimes real estate is owned by an LLC that’s taxed as a partnership and not all of the members want to do a 1031 exchange. They would rather get out of the entity before a sale takes place so that they can take their share of the net proceeds independent from the LLC and deal with the tax consequences. This is sometimes called a TIC (Tenancy in Common) out. The reason that you want to TIC them out is that they don’t want to go along with the rest of the entity and do a 1031 exchange. Rather, they simply want to take their cash and pay their taxes. If you’re going to TIC someone out you need to make sure that you actually transfer the benefits and burdens of ownership. You need to deed them their interest. You want to assign their share of the seller’s rights and obligations in the purchase agreement. You want to notify the insurance company to add an additional insured (the new tenant in common owner). You may also want to talk to your lender that holds the mortgage and get their consent to this transfer.

Find a 1031 Qualified Intermediary

Find a qualified intermediary to help with your next 1031 exchange by reaching out to the team at CPEC1031, LLC. We have been working in the 1031 exchange industry for more than two decades. Our team can help you through all the stages of your 1031 exchange – from document preparation, to property identification, all the way to the closing table. Set yourself up for success by working with a qualified intermediary. We can make sure that you have the best shot at deferring 100% of your capital gains taxes when selling 1031 property.

• 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

Video – Different Kinds of 1031 Exchanges

Forward Exchange

In a forward 1031 exchange, you sell your relinquished property first and you acquire the replacement property second. You can exchange into a single replacement property or multiple replacement properties.

Reverse Exchange

Another option is a reverse 1031 exchange, in which the intermediary acquires the replacement property and holds it for the benefit of the taxpayer. There are two different modalities of a reverse exchange:

1. The Back Leg Reverse Exchange. In this type of exchange, the qualified intermediary acquires the replacement property and holds it for the benefit of the taxpayer.

2. The Front Leg Reverse Exchange. If you can’t park the replacement property for some reason (for example, if your buyer flakes at the last minute), you can do a front leg reverse exchange. In this modality, the intermediary becomes the synthetic purchaser of your old relinquished property to liberate the taxpayer so they can acquire the replacement property.

The Build-to-Suit Exchange

In a build-to-suit 1031 exchange, you sell your relinquished property, put the sales proceeds with the intermediary, who then uses that money through an Exchange Accommodation Titleholder to buy the replacement land. Within the remaining 180 day exchange period, they construct improvements on the property. Let’s say you have a sale of $2 million and a purchase value of only $1.8 million. How do you resolve this $200K discrepancy? Have the intermediary erect improvements during the exchange period so when you receive the replacement property it’s worth at least $2 million.

Call CPEC1031, LLC Today

If you are interested in selling a piece of investment real estate but you don’t want to deal with the associated capital gains tax burden, then a 1031 exchange might be a good option for you! In a 1031 exchange, you can defer your capital gains taxes so long as you meet certain criteria. At CPEC1031, LLC we are here to help you through every step in the like-kind exchange process. We can prepare your documents, ensure you hit the 1031 exchange benchmarks, and answer all of your questions along the way. Get started with your 1031 exchange by giving us a call today!

• 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

Video – Potential Problems in a 1031 Exchange

In a 1031 exchange, you don’t want to buy down in value because then you aren’t continuing your investment into a property of equivalent or greater value.

You also want to avoid taking cash or other non-like-kind property during a 1031 exchange. Let’s say someone wants to buy your $20 million property that you own free and clear, but they’re having a hard time getting financing so they ask if you’ll entertain a contract for deed where they give you $2 million down and $18 million over time.

If you want to do a 1031 exchange you need to buy a property of equal or greater value and equity. If you sell on a contract for deed, you might be shooting yourself in the foot on the ability to do a 1031 exchange. In year one of an installment sale, you get to trigger all of the depreciation recapture. If you took that contract for deed deal, by the time you’re done paying your real estate commissions and recaptured depreciation, your downstroke may be gone. Don’t do seller-backed financing if you want to do a 1031 exchange.

Another potential 1031 problem is not adequately offsetting debt relief. When you sell your relinquished property, they pay off the old mortgage. In order to completely defer your gains in a 1031 exchange, you are expected to acquire a property of equivalent or greater value, equity, and debt. There are two ways to approach this debt relief issue:

1. Take out a new mortgage on the replacement property.

2. Bring cash to the closing table to offset the debt.

Most people opt for option one because they don’t have sufficient cash on hand.

Many people fail to consider the debt offset element in a 1031 exchange and that makes it much more difficult to defer 100% of the capital gains taxes.

Section 1031 – A Tax-Saving Tool

Section 1031 is a powerful provision in the tax code that allows you to save money when selling investment or business real estate. Find out if a 1031 exchange is a good fit for your property by contacting a 1031 exchange company like CPEC1031, LLC. Our qualified intermediaries have more than twenty years of experience in the 1031 exchange industry. We can walk you through the entire process from beginning to end and make sure you hit all the necessary deadlines and benchmarks along the way.

• 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

Video – A Lesson on 1245 & 1250 Property in a 1031 Exchange

In a 1031 exchange, if you treat your property both as 1250 property and as rapidly depreciated components (1245 property) and you exchange right into raw land, there’s going to be a mismatch. That’s because the raw land is considered entirely 1250 property.

This can lead to a mismatch wherein the portion of the property that you treated for rapid depreciation doesn’t have a component to match up with on the replacement property side of the equation. In this scenario, you may not want to purchase purely raw land as your replacement property. You may want to look for some land that has some depreciable components on it (such as a grain silo, chicken coop, etc.) so that you can match up your 1250 gain and your 1245 gain when conducting your 1031 exchange.

Defer Your Taxes When Selling Investment Real Estate

Instead of recognizing a potentially huge capital gains tax burden, defer your taxes with a 1031 exchange when selling investment real estate. Section 1031 of the Internal Revenue Code can be utilized by anyone who satisfies the requirements. Contact a qualified intermediary at CPEC1031, LLC today to learn more about the like-kind exchange process and see if your property qualifies for 1031 exchange treatment. You can find us at our Twin Cities office, which is located in downtown Minneapolis. We are ready and waiting to help you through the 1031 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