1031 exchanges can be broken down into several categories – forward, reverse, complete, partial, etc. In this article, we are going to discuss the partial 1031 exchange vs. the complete 1031 exchange. We will walk through the differences between each type of 1031 exchange.
Complete 1031 Exchange
A complete 1031 exchange is an exchange in which the taxpayer conducting the exchange defers all of their capital gains taxes on the sale of their real property. This is what most people picture when they think of 1031 exchanges.
Partial 1031 Exchange
A partial 1031 exchange is an exchange in which the taxpayer conducting the exchange recognizes some gain, typically as the result of receiving boot.
In most 1031 situations, ideally you want to strive for complete tax deferral. But that’s not always possible. Whether due to a mistake or some unforeseen issue, sometimes taxpayers receive boot and are not able to defer all of their capital gains taxes when selling real estate. In those situations, it’s better to take the partial tax deferral rather than none at all.
Defer Your Capital Gains
Commercial Partners Exchange Company specializes in facilitating 1031 exchanges for investors of all sizes. A 1031 exchange is a great way to defer your capital gains tax when selling real estate. It allows you to keep your money working for you, compounding and building over time. Contact us today to speak with a qualified intermediary and see if your property qualifies for a 1031 exchange. Our primary office is located in downtown Minneapolis, but we work with clients on their 1031 exchanges across the United States.
- 1031 Hotline: If you have questions about partial vs. complete 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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