capital gains taxes

A Few Tips to Cut Your Capital Gains Tax Burden when Selling Real Estate

Capital Gains Tax Burden

Capital gains taxes are at the top of mind for many real estate investors. In this article, we are going to offer up a few tips for cutting your capital gains tax burden when selling real estate.

Qualified Opportunity Funds

Qualified opportunity funds are a new method for deferring capital gains taxes. When selling a piece of real estate, you can move your sales proceeds into a qualified opportunity fund and defer your capital gains tax burden. However, be aware that these capital gains taxes will come due come December 26, 2026.

1031 Exchanges

1031 exchanges are perhaps the best tool for reducing your capital gains taxes when selling a piece of investment real estate. By setting your transaction up as a 1031 exchange, you can defer your capital gains taxes on the sale and reinvest those proceeds into a bigger, better replacement property. The benefits are numerous – you get to avoid a tax windfall and keep your money working for you in a continued investment.

Reduce Your Capital Gains Tax Burden with a 1031 Exchange

Commercial Partners Exchange Company works with investors large and small on their like-kind exchanges of real property. With twenty years of experience working in the 1031 exchange industry, we have the skills needed to assist you in your real estate transaction. Reach out to our 1031 exchange professionals today at our offices in downtown Minneapolis. Let us help you through the complex 1031 exchange process so you can save on capital gains taxes when you sell real estate!

  • 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.

 

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved

 

How to Defer Taxes When Selling Real Estate

Real Estate Taxes

When you sell a piece of real estate, you hope to make as much profit as possible. But with the capital gains taxes assessed on the sale, you may end up owing more than anticipated. A high capital gains tax bill may even be enough to dissuade you from selling your property. A 1031 exchange can solve many of these problems for you. In this article, we are going to talk about how a 1031 exchange can help you defer capital gains taxes when selling real estate.

Using a 1031 Exchange to Defer Taxes

A 1031 exchange is a great tool you have at your disposal to defer taxes on the sale of real estate. How, you ask? Instead of selling your property outright, taking the net proceeds, and paying the required capital gains taxes, you can reinvest your net proceeds into a like-kind replacement property. This is the 1031 exchange in a nutshell. No, you don’t get to pocket the sales proceeds, but you do get to defer a potentially huge capital gains tax hit. As an added bonus, you get to keep your money working for you in a continued investment property.

Capital Gains Tax Deferral

Capital gains taxes can really add up when selling real estate. Why not defer those taxes and keep your money working for you in a continued investment? That’s what a 1031 exchange allows you to do.  Reach out to the qualified intermediaries at Commercial Partners Exchange Company to learn more about the benefits of a 1031 exchange and to see if your property is a good fit. Our main office is located in downtown Minneapolis, but we work with clients throughout the state of Minnesota, and around the United States.

  •  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.

 

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

 

3 Ways to Maximize your Gain with a 1031 Exchange

Maximize Your Gains

A 1031 exchange allows you to defer your taxes and maximize your gain when selling real property. In this article, we are going to offer three tips for maximizing your gain and deferring your taxes with a 1031 exchange of real estate.

Exchange into a Bigger Replacement Property

One of the benchmarks of a 1031 exchange is that you need to go up in value, equity, and debt on your replacement property. This will keep your money compounding and building wealth over time in a bigger investment property.

Exchange into a Different Segment of the Market

You can also exchange into a different market segment with a 1031 transaction. The great thing about real estate exchanges is that nearly all real estate is like-kind to all other real estate. That means you could exchange out of a relinquished property in the retail market and into a replacement property in the hotel industry. This can allow you to move your money into the most advantageous market segments.

Exchange into a Less Management Intensive Property

If you own an apartment building or something else that requires a lot of management work on your part, a 1031 exchange allows you to move your investment into a less management intensive property. This is especially beneficial for older taxpayers who many not want to be as involved with their properties as they once did.

1031 Professionals in Minnesota

The Minnesota 1031 exchange professionals at Commercial Partners Exchange Company have two decades of experience facilitating like-kind real estate exchanges. Our team will work with you to prepare your 1031 documents, answer any questions you may have, and advise you throughout the entirety of your 1031 exchange transaction. You can rest assured that your 1031 exchange is in good hands with us. Contact us today at our downtown Minneapolis office to see if you are a good candidate for 1031 tax-deferral.

  • 1031 Hotline: If you have questions about maximizing your gain with a 1031 exchange, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

 

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

When Do you have to Pay the Deferred Capital Gains Taxes on 1031 Property?

Capital Gains Tax

Many taxpayers have availed themselves of the tax-saving benefits of the like-kind exchange. But as we’ve discussed before, a 1031 exchange allows you to defer your capital gains tax, not avoid it. So when do you need to pay that tax? In this article, we will explain when you need to pay your deferred capital gains taxes on 1031 exchange property.

Capital Gains Taxes

When you sell a property in a 1031 exchange and move your net proceeds into a new replacement property you are not required to pay those capital gains taxes. However, those taxes do not just disappear. If you sell your replacement property in a standard transaction at any point in the future, you will then have to pay the capital gains taxes on that sale.

Defer Until Death

When it comes to 1031 exchanges of real estate, the ideal long-term strategy is to defer your capital gains taxes until death. If you are ready to sell your replacement property at some point in the future, consider doing another 1031 exchange into a bigger property. That way you can keep your money working for you in continued investments, while avoiding capital gains taxes all your life.

Minneapolis 1031 Exchange

If you are getting ready to sell a piece of real estate, but are dreading the capital gains taxes, consider a 1031 exchange to defer those taxes. A like-kind exchange allows you to avoid a big tax windfall on the sale of real estate so long as you move those net proceeds into like-kind property. Contact our Minneapolis qualified intermediaries today to discuss the details surrounding your like-kind exchange. We have been facilitating 1031 exchanges in the Twin Cities and around the country for decades.

  • 1031 Hotline: If you have questions about 1031 exchanges capital gains taxes, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

 

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

How to Calculate Your Capital Gains Tax

Capital Gains Tax Calculator

When you sell a piece of real estate, you are typically required to pay capital gains taxes on the sale of that property. A 1031 exchange can help you defer these taxes, but many taxpayers first want to know how much they are going to owe in capital gains taxes when they sell property. In this article, we are going to explain how to calculate your capital gains tax when selling real estate.

Calculating Your Capital Gains Taxes

Figuring out your potential capital gains taxes is a good demonstration of the benefits of doing a 1031 exchange because it shows you how much you can save. Here are the basic steps to calculate your capital gains tax:

  • Determine your net adjusted basis by adding the capital improvements to the original purchase price and subtracting depreciation.
  • Calculate your actual capital gain on the property by taking the property sales price, subtracting the net adjusted basis, and finally subtracting the cost of sale.
  • Finally, determine the capital gains tax owed by combining your depreciation recapture, federal, and state taxes.

Capital Gains Tax Calculator

To make things even easier for you, we have developed a simple calculator that you can use to calculate your capital gains taxes.

Minnesota Real Estate Exchange Company

If you are looking for a way to defer your capital gains taxes on the sale of real estate, consider a 1031 exchange. At Commercial Partners Exchange Company, we have been facilitating like-kind exchanges of real property for our clients for decades. We can help you through every step of your 1031 exchange by answering your questions, preparing the requisite 1031 documents, and advising you on the details of your exchange. Contact us today to see if you are a good candidate for a 1031 exchange!

  • 1031 Hotline: If you have questions about capital gains taxes and 1031 exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

 

© 2017 Copyright Jeffrey R. Peterson All Rights Reserved