Does the New Tax Plan Allow Reverse 1031 Exchanges?

1031 exchange investors have been asking a lot of questions about the new tax overhaul that went into effect earlier this month. We’re here to answer any questions you may have! One query that we’ve been hearing a lot is whether or not reverse exchanges are still allowed under the new law. In this article, we’re going to talk about whether or not reverse 1031 exchanges are allowed under the new tax law.

Reverse 1031 Exchanges of Real Estate

The new tax law preserves 1031 real estate exchanges. That means forward exchanges, reverse exchanges, build-to-suit exchanges of real estate are still viable. If you are looking to do a real estate exchange and you find a perfect replacement property before selling your relinquished property – a reverse exchange can help you defer your capital gains taxes.

Reverse Personal Property Exchanges

The same is not true of personal property exchanges. Under the new tax law, personal property exchanges are no longer valid. That means reverse exchanges involving personal property are not allowed moving forward.

1031 Reverse Exchange Company in St. Paul, MN

The team of 1031 professionals at CPEC1031 has been helping taxpayers and investors with their like kind exchanges for decades. We have the knowledge and experience needed to guide you through the 1031 exchange process, prepare the necessary documents for your exchange, and answer all of your questions along the way. If you are interested in learning more about the tax-saving benefits of the like-kind exchange, don’t hesitate to reach out to us at our downtown Minneapolis office.

• Start Your Exchange: If you have questions about 1031 reverse exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

1031 Real Estate Exchanges Survive in the New Tax Bill

Since its inception, we’ve been monitoring the new tax bill (The Tax Cuts and Jobs Act) and its potential impact on section 1031 of the Internal Revenue Code. Now that the bill has passed and been signed into law (and officially took effect January 1, 2018), we’d like to offer a brief summation of its effects. In this article, we’ll provide an update on 1031 exchanges now that the new tax bill has been signed into law.

1031 Exchanges & the Qualified Intermediary

The biggest takeaway is that the new bill has preserved the 1031 exchange of real property and the role of the qualified intermediary in facilitating like-kind exchanges.

This bill is the first major tax code overhaul since 1986. It reduces many tax rates and redefines many rules and accounting methods. Thankfully, the bill keeps the 1031 exchange provision for real property.

However, not all 1031 exchanges were preserved with the passage of this bill. The legislation eliminates 1031 exchanges of personal property (aircraft, artwork, gold coins, and the like). This poses many questions for personal property investors who may currently be in the process of conducting a personal property exchange of like-kind property. It’s a good idea to contact your 1031 exchange professional to answer any of your questions about your exchange.

Qualified Intermediaries in Minneapolis

A qualified intermediary is perhaps the most important person you can have on your 1031 exchange team. Hiring an intermediary will ensure that you are insulated from receiving any taxable proceeds during your exchange. Furthermore, your intermediary will act as your advisor throughout the exchange – answering your questions, preparing your documents for closing, and more. At CPEC1031, we have decades of experience acting as qualified intermediaries for clients in Minnesota and throughout the country. Contact us today to speak with a QI about your like-kind exchange!

• Start Your Exchange: If you have questions about 1031 exchanges and the new tax bill, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

An Update on 1031 Exchanges & the GOP Tax Bill

There are a lot of questions surrounding the new GOP tax bill, which could be up for a vote as soon as this week. In this article, we are going to talk briefly about the current status of the new tax bill and its potential impact on like-kind exchanges.

The GOP Tax Bill

Right now, the House and Senate are working to reconcile the differences between the two bills that passed each chamber earlier this year. Things are moving at a fast pace, as the GOP hopes to have a vote by Christmas.

Impact on Section 1031

So what does the new bill say about section 1031 and like-kind exchanges? The good news is that both versions of the bill (from the House and Senate) keep the like-kind real estate exchange intact. That means taxpayers will still be able to defer their taxes on the sale of real property moving forward.

However, both bills eliminate the personal property 1031 exchange. That means exchanges of aircraft, business equipment, livestock, artwork, coins, precious metals, and all other forms of personal property would be excluded from 1031 exchange treatment. This is a big change to section 1031 and the Like-Kind Exchange Coalition has called for a restoration of personal property exchanges to the bill. This has, so far, proved unsuccessful.

Minnesota Qualified Intermediary

Since the bill is still being debated, it’s a little too early to say with certainty what will and will not happen. That being said, if you have any questions about this new tax bill and its potential impact on the like-kind exchange, don’t hesitate to reach out to a qualified intermediary with your questions.

• Start Your Exchange: If you have questions about how the GOP tax bill might impact your 1031 exchange, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2017 Copyright Jeffrey R. Peterson All Rights Reserved