In a 1031 exchange of real estate, you can only use specific types of property. There are strict rules that govern 1031 exchange transactions, and you don’t want to run afoul of them – lest you jeopardize your capital gains tax deferral. In this article, we are going to talk about the types of properties that qualify for 1031 exchange treatment.
Like-Kind Real Estate
All property used in a 1031 exchange must be like-kind real estate. Personal property (such as aircraft, artwork, numismatic coins, etc.) cannot be used for 1031 exchange tax-deferral. Within the realm of real estate, the term “like-kind” is defined broadly. You can typically exchange most types of real estate for most other kinds of real estate, provided that the properties are held for investment or business purposes.
Property Held for Investment or Business Use
Any property involved in a 1031 exchange must be held for investment or business use. You can’t use property that’s used primarily for personal purposes like your family home.
Find a Qualified Intermediary for Your Like-Kind Exchange
Find a qualified intermediary who can help you through the ins and outs of your next 1031 exchange of investment real estate. CPEC1031, LLC has you covered when it comes to all things in the realm of 1031 exchanges. Contact our qualified intermediaries today at our Twin Cities office (located in downtown Minneapolis) to learn more about the like-kind exchange process and see how we can help you defer capital gains taxes with a 1031 exchange. We’re here to help you through all the steps of the 1031 exchange process.
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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