With the current state of the commercial real estate market, it is expensive to buy replacement real estate, mostly because there’s so much competition in the marketplace. As a result, many people are asking themselves: “why would I pay top dollar for an apartment building that was constructed in 1960, when I could buy land and construct a brand-new apartment building for roughly the same amount?”
In this situation, the taxpayer can save even more money in capital gains taxes by doing a build-to-suit 1031 exchange. With a build-to-suit construction exchange, the intermediary uses the exchange funds to buy raw land and holds title to that raw land while real property improvements are constructed on that land. Then the taxpayer receives that property built to their own specifications at the end of the exchange process, while deferring capital gains taxes on the transaction.
We’re seeing this a lot with small business owners who are moving out of the urban core and moving out to places like Lakeville, Ramsey and other places where land is less costly.
1031 Exchange Qualified Intermediaries
CPEC1031, LLC provides qualified intermediary services to taxpayers throughout the country looking to sell investment real estate under section 1031 of the Internal Revenue Code. Our team has over two decades of experience and can help you through all the steps in the 1031 exchange process. Reach out to us today at our downtown Minneapolis office to learn more about the 1031 exchange process, our services, and how we can assist you with your next like-kind exchange!
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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