1031 Exchange

1031 Exchange Idiosyncrasies in the State of Pennsylvania

1031 Exchange Pennsylvania

Some states in the union have unique interpretations of section 1031 of the IRC. Pennsylvania is one such state and conducting an exchange there brings a lot of potential challenges. In this article, we are going to talk about 1031 exchanges in the state of Pennsylvania and how state tax law can impact 1031 exchange transaction.

State vs. Federal Tax Law

Section 1031 of the Internal Revenue Code deals with taxation on the federal level, which means taxpayers can do a 1031 exchange regardless of where they live in the United States. However, various states apply their own layer of taxation to 1031 exchange transactions, which can make matters even more complex.

Pennsylvania 1031 Exchanges

Pennsylvania does not recognize the deferral of gains under section 1031 for state tax purposes. That means if you sell a piece of real property in Pennsylvania you have to report all gains and pay the appropriate taxes on your state income tax form. You can, however, still benefit from federal tax deferral with your 1031 exchange.

CPEC 1031

The qualified intermediaries at CPEC 1031 have been facilitating 1031 exchange transactions for more than twenty years. We can help you through every stage of your commercial transaction – from the sale of your relinquished property to the acquisition of your replacement property. Reach out to us today to set up your exchange! You can find us at our main offices 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

Personal Use & 1031 Exchanges – Striking the Right Balance

Personal Use & 1031 Exchanges

A common question we get about 1031 exchanges is “can I use my vacation home in a 1031 exchange?” The short answer is yes, but you have to be extra careful with this type of exchange. In this article, we are going to talk about how to strike the right balance when it comes to personal use of property and 1031 exchanges.

Rental Use vs. Personal Use

When dealing with 1031 exchanges of vacation homes, you have to pay close attention to rental use vs. personal use. If you use your vacation property for personal use too much, it can disqualify you from 1031 exchange treatment. Here are a few guidelines to follow to ensure the success of your 1031 exchange of your vacation home:

  • Make sure you have owned the property for at least two years prior to and after the sale.

  • In the 1-year periods immediately before and after the exchange, the property must be rented to an unrelated party for at least 14 days.

  • In the 1 year periods immediately before and after the exchange, the taxpayer’s personal use cannot be more than 14 days, or 10% of the days during which the property was rented.

For specific guidelines from the IRS on this topic, check out Revenue Procedure 2008-16.

Skilled Qualified Intermediaries in the Twin Cities

At CPEC1031, we specialize in 1031 exchanges of real estate. Our skilled qualified intermediaries have over two decades of experience helping clients save money on capital gains taxes. Contact us today to set up a time to chat with one of our 1031 exchange specialists. You can find us at our primary office in downtown Minneapolis or at one of our satellite offices across the country. We’re here to help you defer your capital gains taxes on the sale of 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 CPAs can Advise Their Clients on Reverse 1031 Exchanges

Reverse 1031 Exchanges

Reverse exchanges offer a lot of benefits in a hot seller’s market, but many taxpayers are unaware of how to properly utilize this effective tool. In this article, we are going to offer some tips that CPAs can use to advise their clients on reverse 1031 exchanges of real estate.

Use Reverse Exchanges in a Hot Seller’s Market

When the market favors sellers (as it does at the time of this writing), a reverse exchange can be a huge asset. Reverse 1031 exchanges operate a bit differently than standard forward exchanges. In a forward exchange, here is the order of operations:

  1. The taxpayer sells their relinquished property.

  2. The taxpayer identifies new replacement property.

  3. The taxpayer acquires their replacement property and reinvests their sales proceeds into it.

In a reverse exchange, the order of operations is reversed:

  1. The taxpayer acquires their new replacement property first.

  2. The taxpayer identifies their new replacement property in writing.

  3. The taxpayer sells their relinquished property and reinvests the sales proceeds into the replacement property.

Minnesota 1031 Exchanges of Real Property

Looking for a qualified intermediary to facilitated your 1031 exchange? Your search stops here! At CPEC1031, we focus on like-kind exchanges under section 1031 of the IRC. With twenty years of experience under our belts, we have the knowledge and expertise needed to bring your exchange across the finish line. Contact us today at our Minneapolis office to learn more about the 1031 exchange process and get your 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.

 

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved

 

Defer the tax. MAXIMIZE your gain.

Is a 1031 Exchange Right for Me? →