Qualified Opportunity Funds & Capital Gains Tax Deferral

If you sell stock and (during the following 180 days) invest the gain into a qualified opportunity fund, can you defer the taxes on that gain? That’s our topic for this article.

Internal Revenue Code

In short, the answer to the question at hand is yes. Here is some clarifying information straight from the IRS website:

“Under § 1400Z-2(a)(1) of the Internal Revenue Code, you may elect to defer the tax on some or all of that gain.  If, during the 180-day period, you had invested in one or more Qualified Opportunity Funds only an amount that was less than your entire gain, you may still elect to defer paying tax on part of the gain, up to the amount that you invested in that way.”

Like-Kind Exchange Tax Deferral

The like-kind exchange professionals at CPEC1031 have twenty years of experience in the industry and can handle even the most complex exchanges. With a qualified intermediary by your side, you will have someone who can prepare all of your 1031 documentation for closing, and advise you of the best decisions at every step of the exchange. Contact us today to set up your real estate exchange. Our main office is located in downtown Minneapolis, but we serve the entire state of Minnesota as well as the rest of the country.

• 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.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

Common Misconceptions about 1031 Exchanges of Real Estate

The 1031 exchange has been around since the early 20th century, yet there are numerous misconceptions surrounding it. In this article, we are going to clear up a few of the most common misconceptions about 1031 exchanges of real estate.

I Can Complete My Exchange at Any Time After it Starts

Wrong. 1031 exchanges are governed by very strict time constraints. You’ve only got a total of 180 days to finish your exchange after you sell your relinquished property. The first 45 of those days are your identification period in which you must provide written identification of the properties into which you wish to exchange.

I Will Defer All of My Capital Gains Taxes When I Do a 1031 Exchange

Not necessarily. Ideally, you want to defer 100% of your capital gains taxes in your exchange, but that doesn’t always happen. If you receive any cash boot during the exchange, you will be subject to capital gains taxes. Likewise, if you fail to exchange into a property of equal or greater equity, value, and debt, you may only receive a partial tax deferral.

I Can Do a 1031 Exchange All By Myself

A 1031 exchange is not something you can do all by yourself. You need to involve a neutral third-party (typically a qualified intermediary) who can receive and reinvest the sales proceeds on your behalf.

Qualified Intermediary Specialists in MN

At CPEC1031, our qualified intermediaries are specialists in exchanging real property. A qualified intermediary can help you organize your 1031 exchange documentation, advise you on replacement property identification, and answer all of your questions throughout the process. Contact us today at our downtown Minneapolis office to learn more about the 1031 exchange process and get your like-kind exchange off the ground.

• 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.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

How to Properly Identify Real Property in a 1031 Exchange

Properly identifying your replacement property is an important aspect of a 1031 exchange of real estate. But many taxpayers are confused about how to properly identify their replacement property. In this article, we are going to talk about how to properly identify real property in a 1031 exchange.

Unambiguous Description

Section 1031(a)(3) and Section 1.1031(k)-1(c) provides that a written unambiguous description of the intended replacement property or properties, signed by the Exchangor must be sent to the qualified intermediary or other person who is a party to the exchange and who is not a disqualified person.

If you have any questions about how to properly identify your replacement property – ask your qualified intermediary. That’s what they’re there for, to answer any and all of your questions throughout the course of your 1031 exchange.

Are You a Good Candidate for 1031 Exchange?

Are you looking to sell real estate, but are hesitant because of the capital gains taxes you’ll owe on the sale? If so, a 1031 exchange may be the best option for you! The first step in any 1031 exchange is to contact an experience qualified intermediary who can advise and guide you throughout the exchange process. Contact us today to speak with a Twin Cities 1031 exchange professional about the details surrounding your sale. We are located in downtown Minneapolis, but we work with clients throughout the United States.

• 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.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

Does My 1031 Exchange Period Include Weekends & Holidays?

One of the first things you need to know about a 1031 exchange is that you only have a limited amount of time to complete your 1031 exchange. Specifically, you have 180 days in total from the start to the end of your exchange. In this article, we are going to discuss the 1031 exchange period and whether or not it includes weekends and holidays.

Defining Your Exchange Period

Your exchange period begins when you sell your relinquished property (or when you acquire your replacement property if you are doing a reverse exchange). From that point on you have 180 days to complete your exchange. The first forth-five of those days are set aside as your identification period – the time in which you have to identify in writing all of your replacement properties.

Weekends & Holidays

Weekends and holidays are not excluded from your exchange period. All weekends and holidays count as part of your 180 days. Furthermore, if your 180 day deadline falls on a Saturday, Sunday, or on a holiday, you will not get an extension.

1031 Intermediaries in Minneapolis, MN

The intermediaries at CPEC1031 work with clients in all real estate industries on their 1031 exchanges. With more than twenty years of experience, our intermediaries have the skills needed to facilitate your exchange from start to finish. Contact us at our downtown Minneapolis office today to speak with an intermediary about your like-kind exchange and defer your capital gains taxes on your next real estate sale.

• 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.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

Why 1031 Exchange Land Swaps are a Great Investment

Swapping land in a 1031 exchange can lead to big payoffs down the line. In this article, we are going to talk about how 1031 exchange land swaps can result in big results over the long-term.

Recapping the Benefits of Land Exchanges

Section 1031 of the Internal Revenue Code offers all taxpayers the opportunity of deferring their capital gains taxes when they sell real estate so long as they meet certain guidelines. First, the exchanged land must be held for investment or business purposes (not for personal use). Second, the exchange must be completed within 180 days and abide by other strict timeframes. These are just a couple of many rules that must be satisfied in a 1031 exchange. When done correctly, the taxpayer doing the exchange is able to avoid a big tax bill on the sale of their property.

Over the long-term, the taxpayer can watch their investment grow in their replacement property. If and when you want to sell that replacement property, you can consider doing another 1031 exchange to keep the investment ball rolling!

Minnesota 1031 Exchange Professionals

The qualified intermediaries at CPEC1031 have over two decades of experience working on 1031 exchanges. A 1031 exchange accommodator can help you through every stage of your 1031 exchange from start to finish. Specifically, our intermediaries can prepare all of your documentation, advise you on what replacement properties to purchase, and answer all of your questions along the way. Contact us today to get started with your 1031 exchange of real estate. Our primary office is located in the heart of downtown Minneapolis but we work with clients all over the state of Minnesota, as well as throughout the United States.

• 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.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved