Many taxpayers who inherit investment property want to know what their options are, and more importantly, the best way to proceed in their particular situation. In this article, we’re going to talk about inheriting 1031 exchange investment property and the options available to you.
Let’s say you inherited a property that had been 1031 exchanged into by the previous owner. You have a few general options: hold on to the investment property, or sell it.
However, before you get trigger happy and sell your inherited property, it’s important to consider whether that’s the best option for you in the long-term. There is a reason why the previous owner did a 1031 exchange on the property before handing it down to you (and any other heirs). That reason is tax deferral. 1031 exchanges allow you to defer your capital gains taxes on the sale of real estate as long as you move the net proceeds into a replacement property. Over time, you can continue exchanging into bigger and better property, while avoiding capital gains taxes. Indeed, this is a much more tax-advantageous plan than selling the property outright.
Twin Cities 1031 Exchanges
At Commercial Partners Exchange Company, we have twenty years of experience facilitating 1031 exchanges for clients in many industries. Our intermediaries work directly with our clients to make sure the exchange process goes as smoothly as possible. We can advise you on your replacement properties, prepare all of your 1031 documents, and more. Reach out to our 1031 exchange professionals today to set up your exchange. Our office is located in downtown Minneapolis but we work with clients all throughout the state, as well as across the country.
- 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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