If you’ve ever filed a tax return, you know the anxiety that comes with potentially getting audited by the IRS. Even if you’ve got everything in order, it’s still a nerve-wracking process. In this article, we are going to discuss how often 1031 exchanges get reviewed by the IRS.
Personal Use Property
When it comes to 1031 exchanges, the IRS is most interested in the realm of personal use properties like lake cabins, condos, ski chalets, and the like. Keep in mind that it’s not just the IRS that takes an interest in these transactions – it’s also state authorities like the Minnesota Department of Revenue. State authorities are sometimes even more aggressive than the IRS.
Large Transactions
Larger transactions also tend to garner more interest from the IRS and state taxation agencies. The bigger your 1031 exchange, the more likely you may face an audit. This is simply because the changes of a larger tax collection are proportioned to the size of the deal itself. If you’re doing a $90 million 1031 exchange – there’s probably a good chance the IRS will take a look at that transaction. This, of course, underlines the importance of making sure you have all of your bases covered and that you are abiding by all of the rules set out in section 1031 of the Internal Revenue Code.
Contact CPEC1031, LLC
Are you looking to defer your capital gains taxes on the sale of investment or business real estate? If so, a 1031 exchange may be your best option. Contact the 1031 exchange professionals at CPEC1031 today to learn more about the like-kind exchange process and see if you are a good candidate. Our qualified intermediaries have over twenty years of experience working on 1031 exchanges of all shapes and sizes. We can walk you through the process and ensure all of your bases are covered.
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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