Two Rules About Related Parties in a 1031 Exchange

1031 exchanges between “related parties” are somewhat common, but can present a host of additional issues. As a result, it’s important to understand the requirements and restrictions of related party 1031 exchanges. In this article, we are going to discuss three rules to remember about related parties in a 1031 exchange.

Defining Related Party

A related party for the purposes of a 1031 exchange is defined in Sections 267(b) and 707(b) of the Internal Revenue Code. Related parties include, but are not limited to, immediate family members, such as brothers, sisters, spouses, ancestors and lineal descendants. Related parties do not include stepparents, uncles, aunts, in-laws, cousins, nephews, nieces and ex-spouses.

Holding Requirement

Another issue you need to be cognizant of with related party exchanges is timing. As a general rule, you and your related party should hold your properties for a minimum of two years after the exchange. If either property is disposed of before this two year holding period, the exchange will be disallowed. There are a few rare exceptions to this rule, but it’s a good general guideline to follow.

CPEC1031

At CPEC1031, LLC, we specialize in facilitating 1031 exchanges of real estate for taxpayers in Minnesota and around the United States. Our intermediaries have more than two decades of experience, and work tirelessly to ensure that your exchange is a success. Contact us today to learn more about the services we have to offer and set up an appointment with one of our team members. Our main office is located in downtown Minneapolis but we have satellite offices in other states as well.

• 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.

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved

How 1031 Exchanges Can Help Build Your Portfolio

A 1031 exchange can be a beneficial tool as you prepare for retirement. In this article, we are going to discuss how 1031 exchanges of real estate can go a long way in helping you build your portfolio.

Change Locations

If you wish to move to a different location for your retirement years (perhaps somewhere warmer), a 1031 exchange can help you achieve that goal. Section 1031 allows you to complete a 1031 exchange between different states, so you can sell an investment property in one state and exchange into a different property in a completely different state.

Decrease Your Responsibilities

Acting as a landlord to a group of tenants can be a demanding and exhausting job. If you find yourself getting on in years and not having the energy to be a landlord anymore, a 1031 exchange can be your ticket to bigger and better things. You can use a 1031 exchange to move into a less management-intensive property.

Increase Passive Income

A 1031 exchange allows you to move into a more lucrative commercial investment. If you own an apartment building, you can 1031 exchange into a warehouse or office building that may have a higher rate of return – thus bringing in more passive income as you approach retirement.

Minnesota Like-Kind Exchange Professionals

If you are looking for a like-kind exchange professional to help you through your 1031 exchange, look no further than CPEC1031. Our team of qualified intermediaries has more than 20 years of experience serving taxpayers all over the country. We can help you arrange your 1031 exchange, prepare your required documentation, and answer all of your questions. Contact us today at our downtown Minneapolis office to learn more about our services and set up a time to chat with one of our professionals.

• 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.

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved

Your 1031 Exchange Guide for 2019

A new year brings new possibilities. If you’re thinking about selling a piece of real estate in 2019, you may want to consider a 1031 exchange instead of an outright sale. Doing so could save you a lot of money in taxes. This article will act as a brief guide to 1031 exchanges in 2019.

Remember the New Rules

2018 brought some significant changes to 1031 exchanges, as the Tax Cuts & Jobs Act went into effect. These new rules will remain in effect in 2019 so it’s important to keep them in mind. Most importantly, remember that you can only do 1031 exchanges of real property – personal property is no longer eligible for 1031 treatment.

Give Yourself Plenty of Lead Time

1031 exchanges can get very complicated very quickly. With so many moving parts and so much that can potentially go awry, it’s a good idea to give yourself as much lead time as possible. That means reaching out to a qualified intermediary before you sell your relinquished property. The earlier you start planning, the better.

Contact a Qualified Intermediary

If you’re thinking about doing a 1031 exchange contact CPEC1031 right away. With more than twenty years of experience, our intermediaries provide the highest level of service to our clients during their 1031 exchanges. We can help you through every step of the like-kind exchange process – filling out your paperwork for you, advising you on replacement property, and more! Contact us today to learn more about how we can help you save taxes on your next real estate sale. You can find us at our main office in 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.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

Timing Matters in a 1031 Exchange

Timing is everything in a 1031 exchange. In this article, we’re talking about the various timing issues that can potentially arise before, during, and after a 1031 exchange.

1031 Timelines

1031 exchanges are governed by strict timelines. You’ve got 180 days total to complete your 1031 exchange. The first 45 of those days are set aside as your identification period, in which you need to identify your replacement property.

If you go over these timelines, your exchange will fail and you will recognize your capital gains taxes. There are still options if you find yourself in this situation (DSTs being one option), but it’s best to avoid exceeding these time frames when possible.

Holding Periods

In addition to the 1031 exchange time periods, you also need to be cognizant of your timing after your complete your exchange. After you complete an exchange, you can’t just turn around and sell your new replacement property right away and reap the sales proceeds. The IRS would see this and invalidate your exchange.

As a general guideline, you want to hold onto your new replacement property for at least 2 years after your transaction before selling or exchanging again.

Save Money on Taxes

If you’re looking to save money on taxes when selling real estate, a 1031 exchange may be just the ticket! When you exchange property under section 1031, you can defer your capital gains taxes as long as you move your sales proceeds into a like-kind replacement property. A qualified intermediary can help you through each and every stage of the 1031 exchange process. Contact our intermediaries today to get a better sense of our services and how we can help you save money on taxes when selling real estate!

• 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

1031 Exchange Tips for Accountants

Many accountants and CPAs work with clients who are interested in 1031 exchanges. In this article, we are going to offer up a few 1031 exchange tips for accountants to help their clients when considering like-kind exchanges.

The Complexities of a 1031 Exchange

Most accountants and CPAs are not experts in the realm of 1031 exchanges. Like-kind exchanges, though they may seem simple, can be incredibly complex as there are a litany of rules and regulations you need to abide by. Many CPAs have a basic understanding of how 1031 exchanges work and can explain the benefits to their clients, but they can’t execute a 1031 exchange on behalf of their clients. That’s where a qualified intermediary becomes invaluable.

Partner with a Qualified Intermediary

If you are an accountant or CPA and your client is asking about doing a 1031 exchange, it’s important to refer them to a qualified intermediary who understands the ins and outs of the 1031 exchange process. We partner with many accountants and CPAs to offer 1031 exchange help to their clients as needed.

CPEC1031 in Minneapolis

At CPEC1031, our like-kind exchange professionals make it a point to give every 1031 exchange the attention it deserves. No matter what type of property you’re looking to exchange, we can advise you throughout the process so you feel comfortable and informed. Give us a call today to learn more about the like-kind exchange process and to get your exchange up and running. Our main office is located in downtown Minneapolis, but we work with clients throughout 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