Reinvesting your real estate returns is easy with section 1031 of the Internal Revenue Code. In this article, we are going to offer up some tips for reinvesting your real estate returns using a 1031 exchange.
Defer Taxes Indefinitely
The beauty of a 1031 exchange is that, when done properly, you can defer your capital gains taxes indefinitely by continually reinvesting the sales proceeds into new replacement property. This allows you to keep your money working for you in a continued investment, compounding wealth over time rather than cutting a check to the government.
Always Trade Up
One important thing to keep in mind when exchanging like-kind property is that you always want to trade up when it comes to your replacement property. That means your replacement property needs to be equal to or greater than your relinquished property in value, equity, and debt. In order to defer 100% of your gains, you need to be sure to satisfy these requirements.
Be Mindful of Your Timing
1031 exchanges are governed by strict time lines. Be sure you meet the necessary deadlines or your exchange will fail.
1031 Exchange Resources
If you need help with your 1031 exchange, let the professionals at Commercial Partners Exchange Company help. Our qualified intermediaries have two decades of experience assisting clients with their real estate exchanges under section 1031 of the Internal Revenue Code. We can help advise you throughout the process, prepare your documentation, and answer all of your questions. Contact us today at our downtown Minneapolis office to learn more about our services and get started with your very own 1031 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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