A 1031 exchange, named after Section 1031 of the Internal Revenue Code, allows investors to defer capital gains taxes when they sell one investment property and reinvest the proceeds into another qualifying property. The replacement property must be considered “like-kind” and must also be held for investment or business purposes.
This strategy is commonly used by investors to upgrade properties, diversify their portfolios, or move investments into different markets while postponing tax liability.
Why Planning Ahead Is Critical
A 1031 exchange has strict timelines and procedural requirements. If you wait until after a sale has closed to explore your options, it may already be too late to structure the exchange correctly.
Before listing or selling your investment property, it is wise to evaluate:
Whether your property qualifies for a 1031 exchange
What type of replacement property you want to acquire
Whether a 1031 exchange investment fits your long-term strategy
Early planning helps ensure that you preserve your ability to defer taxes and avoid costly mistakes.
Find a 1031 Exchange Intermediary Near You
If you’re thinking about doing a 1031 exchange, it’s important to work with a qualified intermediary who can walk you through the process from start to finish, answering any questions you might have along the way. At CPEC1031, LLC our intermediaries have been helping taxpayers in Minnesota and across the United States on their 1031 exchanges for decades. We have the skills and experience necessary to ensure that your exchange is set up properly to defer 100% of your capital gains tax burden. Reach out to our team of like-kind exchange professionals today to find a time to discuss your next 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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