What exactly does it mean to participate in a 1031 exchange? There are many potential benefits to the taxpayer. In this article, we’re going to talk about what it means to participate in a 1031 exchange of real estate.
Capital Gains Tax Savings
The most meaningful benefit of participating in a 1031 real estate exchange is the resulting capital gains tax deferral. In most real estate sales, the seller is hit with a capital gains tax bill for the sale. 1031 exchanges offer the seller an alternative to paying these capital gains taxes. Participating in a 1031 exchange allows the seller to defer this tax bill and keep that money working proactively in a continued investment, rather than writing a check to the government.
While that may sound simple, there are a lot of rules and benchmarks you need to follow in order to complete a successful 1031 exchange. You’ve got to finish the exchange within set timeframes, and you need to make sure your property qualifies for 1031 treatment in the first place.
Get Your Exchange Started
At Commercial Partners Exchange Company, we provide qualified intermediary services to clients in Minnesota and throughout the United States. With more than twenty years of experience, our 1031 exchange professionals are well-equipped to help you defer taxes with an exchange of real property. We can prepare all of your paperwork, answer all of our questions, and advise you. Contact us today at our office in downtown Minneapolis to talk with one of our qualified intermediaries about your 1031 real estate exchange.
- 1031 Hotline: If you have questions about the 1031 exchange process, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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