If you want to defer every penny of your taxes in a 1031 exchange you can do so. But not everyone wants a 100% tax deferred exchange. Some people are happy to take some taxable boot because they want to pay off debt, or they simply need the resources. When you take that cash you have to be willing to take your lumps in the form of taxation on that money.
Another technique that you may want to consider is instead of taking cash at the sale of the relinquished property, you could complete the exchange by reinvesting 100% of your cash proceeds into a replacement property of sufficient value. Later, in a subsequent transaction you could put debt on the replacement property. When you borrow money outside of the confines of a 1031 exchange you don’t pay taxes on that money because you have an obligation to repay that loan, so it’s not gross income. This two step process could save you a lot of money in taxes.
Get Your Like-Kind Exchange Off the Ground
Get your like-kind exchange of real property off the ground today by engaging a qualified intermediary at CPEC1031, LLC. With more than twenty years of experience at our backs, we have the skills and expertise needed to make sure your 1031 exchange is successful. Let us handle all the unique details of your 1031 exchange so you can focus on other things. Set up a time to discuss your next like-kind exchange with our team of qualified intermediaries. You can reach us at our Twin Cities office, located in the heart of downtown Minneapolis.
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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