Exchanging property under section 1031 of the Internal Revenue Code can lead to significant tax deferral when done correctly. However, many taxpayers who want to do a 1031 exchange don’t know where to start. In this article, we’re going to talk about the process of getting a 1031 exchange started, and the information you need to gather before you begin the process.
Initial Information
The first thing you need to do is gather some initial information that you can send to your qualified intermediary in order to begin the process. Here’s some initial information you should get together:
Your contact info – name, DOB, phone, etc.
Relinquished property info – projected closing date, value / debt / equity of the property, how you hold title to the property, the original purchase price, etc.
Replacement property into – how you plan to take title to your new replacement property, the amount / type of debt on the new replacement property, etc.
This is just the tip of the iceberg, but this information will be enough to get the ball rolling. Your qualified intermediary will work with you throughout the exchange and request additional information when needed.
1031 Exchange Property
With a 1031 exchange, you can defer your capital gains taxes when you sell a piece of real property. This can really add up and result in a significant amount of tax savings when selling real estate. But 1031 exchanges aren’t as easy as many taxpayers think. We’ve seen many taxpayers go into an exchange without the necessary preparation, only to have their exchanges fail. That’s why it’s essential to work with a qualified intermediary who can advise you, prepare your documents, and walk you through each step of the exchange process. Contact us today to speak with our 1031 exchange intermediaries about your exchange!
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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