A Few Tips to Cut Your Capital Gains Tax Burden when Selling Real Estate

Capital gains taxes are at the top of mind for many real estate investors. In this article, we are going to offer up a few tips for cutting your capital gains tax burden when selling real estate.

Qualified Opportunity Funds

Qualified opportunity funds are a new method for deferring capital gains taxes. When selling a piece of real estate, you can move your sales proceeds into a qualified opportunity fund and defer your capital gains tax burden. However, be aware that these capital gains taxes will come due come December 26, 2026.

1031 Exchanges

1031 exchanges are perhaps the best tool for reducing your capital gains taxes when selling a piece of investment real estate. By setting your transaction up as a 1031 exchange, you can defer your capital gains taxes on the sale and reinvest those proceeds into a bigger, better replacement property. The benefits are numerous – you get to avoid a tax bill and keep your money working for you in a continued investment.

Reduce Your Capital Gains Tax Burden with a 1031 Exchange

CPEC1031 works with investors large and small on their like-kind exchanges of real property. With twenty years of experience working in the 1031 exchange industry, we have the skills needed to assist you in your real estate transaction. Reach out to our 1031 exchange professionals today at our offices in downtown Minneapolis. Let us help you through the complex 1031 exchange process so you can save on capital gains taxes when you sell 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.

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved

How 1031 Exchanges Can Help Build & Benefit Communities

Many people are critical of section 1031 and argue that it is essential a mechanism for dodging taxes. However, section 1031 is not a tax-dodging tool (it only defers taxes that must be paid at a later date). In fact, section 1031 is extremely beneficial for building communities. In this article, we are going to discuss how 1031 exchanges of real estate can help build and benefit communities.

1031 Exchange Benefits for Communities

There are many ways that 1031 exchanges help build and benefit communities. Here are a few:

• They allow capital to flow more efficiently into different segments of the market.

• They encourage savings and investment in the US economy.

• They stimulate the economy and help create jobs.

The Other Side of the Argument

Opponents of section 1031 argue that 1031 exchanges allow investors to avoid paying capital gains taxes that would otherwise go to the federal government. This is true, but also a bit short-sighted. If 1031 exchanges were abolished tomorrow, investors would be forced to pay capital gains taxes on their real estate sales. However, this would also discourage investors from selling in the first place. 1031 exchanges are beneficial in the long-run because the encourage investors to keep reinvesting their capital into new property – thus benefiting their communities.

Get Help with Your 1031 Exchange

If you are looking for help with your 1031 real estate exchange, you’ve come to the right place! The qualified intermediaries at CPEC1031 have over two decades of experience helping clients through the ins and outs of the like-kind exchange process. We have the knowledge and the expertise needed to ensure the success of your transaction. Contact us today at our downtown Minneapolis office to learn more. We work with clients in Minnesota and across 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.

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved

Why 1031 Exchanges are Better than Qualified Opportunity Zones

Qualified opportunity zones are a relatively new option for investors to defer their capital gains taxes by reinvesting their net proceeds from a sale into a qualified opportunity fund. These exist as an alternative to 1031 exchanges, but opportunity zones are not always a better option. In this article, we are going to explain why 1031 exchanges are a better tax-deferral option than qualified opportunity zones.

What is a Qualified Opportunity Zone?

A qualified opportunity zone allows investors to defer their capital gains taxes on the sale of property by reinvesting their capital into qualified opportunity zones. However, these taxes will eventually come due on December 31, 2026.

Benefits of a 1031 Exchange over a Qualified Opportunity Zone

A 1031 exchange is similar to a qualified opportunity zone in that they both offer tax-deferral. However, 1031 exchanges are different in some key ways that set them apart from opportunity zones. Unlike a qualified opportunity zone, a 1031 exchange has no set expiration date when your capital gains taxes come due. With a 1031, your deferred taxes are due when you sell your replacement property. However, you can defer those taxes once again if you set up your sale as a 1031 exchange. With this strategy you can effectively continue deferring your taxes until you die.

Set Up Your 1031 Exchange

Setting up your 1031 exchange is easy when you work with a qualified intermediary. At CPEC1031, our intermediaries have more than two decades of experience facilitating exchanges of real estate. We can help you through the entire exchange process – answering all of your questions and preparing all of your required documents along the way. Contact us today to learn more about the exchange process and whether your property qualifies.

• 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

Even Small Investors Can Benefit from 1031 Exchanges

A lot of people (incorrectly) assume that 1031 exchanges are only for big investors. The fact of the matter is that any United States taxpayer can benefit from the tax-saving benefits of 1031 exchanges – even small “mom and pop” investors. In this article, we’re going to talk about how small investors can avail themselves of the benefits of section 1031 of the Internal Revenue Code.

1031 Exchange Rules

While there are many rules that govern how 1031 exchanges operate, there are no rules that prevent a small-time investor from conducting an exchange of real estate. Here are the important rules you need to be aware of if you’re a small investor interested in doing a 1031 exchange:

• Timing. The first rule is timing. Once you sell your relinquished property, you only have 180 days to complete your exchange.

• Property. All property involved in the exchange must be like-kind real estate. No personal property, or real estate held for personal use.

• Debt, Equity, Value. You also need to make sure that your replacement property greater than your relinquished property in terms of debt, equity, and value.

1031 Exchanges for Small Investors

CPEC1031 works with investors large and small on their 1031 exchanges of real estate. Our qualified intermediaries have more than two decades of experience helping taxpayers defer their capital gains taxes on the sale of real property. Contact us today to learn more about our like-kind exchange services and set up your appointment with one of our qualified intermediaries. You can find us at our main office located 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.

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved

How 1031 Exchanges Effectively Stimulate the Economy

1031 exchanges are great for the economy, but many people don’t know why that’s the case. In this article, we are going to explain how 1031 exchanges are effective at stimulating growth in the US economy.

Incentivizing Investment

1031 exchanges incentivize investment in real estate. A huge capital gains tax bill is often a big deterrent for an investor when considering a real estate sale. Since section 1031 allows investors to defer this potentially large tax bill, it incentivizes them to sell their property and reinvest their capital into a new real estate investment.

Moving Capital Around

This has the added bonus of keeping capital moving in the real estate industry. When capital gains taxes are scaring off sellers, the market can become stagnant. 1031 exchanges offer a good reason for investors to reinvest their net proceeds from a real estate sale into a new replacement property.

Creating Jobs

1031 exchanges are also a great method for creating jobs – particularly when it comes to build-to-suit exchanges. These exchanges involve adding construction improvements to the replacement property. The catch is that these improvements need to be finished in a short time period – which means a lot of great construction jobs can be created very quickly.

Like-Kind Exchanges

Like-kind exchanges of real estate are great for taxpayers and the economy as a whole. Let us help you save money in capital gains taxes with a 1031 exchange. Our qualified intermediaries have twenty years of experience working on 1031 exchanges all over the country. We can prepare all of your documents, advise you on replacement property, and answer all of your questions. Give us a call today to discuss the specifics of your 1031 exchange. Our primary office is in downtown Minneapolis, but we work with taxpayers 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.

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved