When it comes to investing in real estate, you have several options for how to structure the ownership of the property. In this article, we are going to offer some tips for choosing the right ownership structure for your next real estate investment property.
Real Estate Ownership Structures
Here are the most common examples of real state ownership structures:
- Grantor Trust
- Tenancy-in-Common (TIC)
Use TIC for 1031 Exchanges
When it comes to 1031 exchanges of the property in question, a little foresight goes a long way. While all of the above listed ownership structures can do a 1031 exchange, there are some restrictions. If you want to do a 1031 exchange on property owned in a partnership, LLC, S-corp, or grantor trust, all investors need to re-invest into the replacement property together. This works just fine if all owners are in agreement about how to handle the sale. If you anticipate using a 1031 exchange when you sell your property, then the best ownership structure is the TIC (Tenancy-in-Common) option.
MN Qualified Intermediaries for 1031 Exchange
If you are selling real estate and want to avoid a big tax windfall, consider a 1031 exchange, which allows you to defer your capital gains taxes. Commercial Partners Exchange Company is a Minnesota-based group of qualified intermediaries who specialize in 1031 exchanges of real property. Our skilled qualified intermediaries have more than twenty years of experience facilitating exchanges for investors all over the United States. Contact us today at our downtown Minneapolis office to learn more about how a 1031 exchange can benefit you.
- 1031 Hotline: 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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