How Long Do You Have to Complete Your 1031 Exchange?

Timing is an important factor in any 1031 real estate exchange. In this article, we are going to talk about how much time you have to complete a typical 1031 exchange of real estate.

Standard Time Frames

The answer to the question at hand largely depends on where you are in the 1031 exchange process. Have you already sold your relinquished property? Are you still in the planning stages? These are all important questions to take into consideration.

As we have discussed before, there are some standard time frames that you need to follow when conducting a 1031 exchange of real estate. The big numbers you need to keep in the back of your mind are 180 and 45. You have a total of 180 days to complete your exchange, starting when you sell your relinquished property. If your exchange is not complete by midnight of the 180th day, your exchange will fail and you will not be able to defer your capital gains taxes. You also have the first 45 days of your exchange period in which to identify your replacement property.

You can calculate your 1031 exchange deadlines and time frames with our free online calculator.

1031 Exchange Facilitators

Section 1031 of the Internal Revenue Code is available to all US taxpayers and can significantly reduce the amount of taxes owed on the sale of real estate. If you are at all interested in the tax-deferral benefits of a like-kind exchange, contact the qualified intermediaries at CPEC1031, LLC. With over twenty years of experience, our 1031 exchange facilitators have the knowledge and experience needed to guide you through every step of your exchange. Contact us today at our office in downtown Minneapolis to set up a time to chat with our team of 1031 exchange 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved

Here’s What You Need to Start a 1031 Exchange

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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved

What Types of Property are Barred from 1031 Exchange Treatment?

Not all property can be exchanged in a 1031 transaction, and it’s important to know the distinction between acceptable property and excluded property. The recent Tax Cuts & Jobs Act brought additional changes to section 1031 and what property is allowed. In this article, we are going to talk about the property that cannot be exchanged in a 1031 transaction.

Personal Property is Excluded

The Tax Cuts & Jobs Act, which went into effect a couple of years ago, preserved 1031 exchanges of real estate, but got rid of 1031 exchanges of personal property. That means you cannot do a 1031 exchange involving any items of personal property. The following is a list of some personal property items that can no longer be exchanged in a 1031 transaction:

• Aircraft

• Artwork

• Gold Coins

• Livestock

• Business Equipment

Other Property Benchmarks

There are also other benchmarks you have to satisfy with your 1031 exchange property. The property involved in the exchange needs to be held for use in your trade or business, or for investment purposes. Property that you hold for personal use (such as your primary residence) will not qualify for 1031 treatment.

1031 Exchange Help

If you are searching for help with your 1031 exchange, you’ve come to the right place! The qualified intermediaries at CPEC1031, LLC can help you through every stage of your exchange – from the sale of your relinquished property to the closing of your replacement property. With more than two decades of experience under our belt, we have the skills needed to help you. Contact us today to learn more about the like-kind exchange process and get your exchange up and running! Our primary office is located in downtown Minneapolis, but we work with clients throughout Minnesota and across 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved

1031 Exchange Tips for Building Wealth

1031 exchanges are a great vehicle for building wealth, but many investors aren’t aware of the wealth-building benefits of the like-kind exchange. In this article, we’re going to discuss how to build wealth with 1031 exchanges of real estate.

It’s All About Keeping Your Money Active

At the end of the day, building wealth is about keeping your money working for you in an active investment.

When you sell a piece of commercial real estate, you are responsible for paying the necessary capital gains taxes on that sale. But wouldn’t it be better to avoid writing that check to Uncle Sam and instead rolling those sales proceeds into a new property? That’s exactly what a 1031 exchange does for you. It helps you avoid a big tax bill and keeps your money compounding and building wealth over time in a continued investment. Who wouldn’t want that?

1031 exchanges exist in the Internal Revenue Code to encourage investment. Deferring capital gains taxes on the sale of real estate is a pretty sweet deal, and the IRS allows it as long as you meet the required benchmarks for 1031. This benefits the economy as a whole, as well as the individual taxpayer conducting the exchange who gets to watch their money continue to build wealth instead of cutting a check for the tax on the sale.

Qualified Intermediaries in Minnesota

We partner with the skilled qualified intermediaries at CPEC1031, LLC to provide our clients with top-notch 1031 exchange services when needed. The intermediaries at CPEC1031 have been facilitating exchanges for more than two decades in Minnesota and across the country. If you are interested in learning more about how you can save money on the sale of real estate, contact us today at our downtown Minneapolis office to learn more about the 1031 exchange process.

• 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved

3 Methods for Securing Your Money in a 1031 Exchange

A 1031 exchange requires you to move all of the sales proceeds from your relinquished property over to your replacement property. You want to avoid receiving any of these funds during the process, because doing so will trigger taxable boot. So how to you ensure that your 1031 exchange funds are secure during your transaction? In this article, we are going to offer three tips for securing your funds in a 1031 exchange.

Separate Escrow Account

Working with a qualified intermediary is the best way to make sure your funds are safe and secure throughout the like-kind exchange process. Find a company that deals exclusively with 1031 exchanges. Your intermediary can set up a separate escrow account and have the net proceeds transferred into that account after the relinquished property closing. This is where the funds will remain until you are ready to acquire your replacement property.

Escrow Agreement

You should also have the bank enter into an escrow agreement with the intermediary that will lock down the funds unless you have co-authorization from you and the intermediary to withdraw.

Work with a Reputable Qualified Intermediary

Finally, you should make sure that your qualified intermediary has a Fidelity Bond and an errors and omissions policy so you have all of your bases covered.

Minnesota Exchanges of Real Property

CPEC1031, LLC works with clients in many different industries and states on their 1031 exchanges. Working with an intermediary on your exchange is one of the best ways to ensure a successful exchange. Our intermediaries have twenty years of experience facilitating exchanges in Minnesota and around the country. Contact us today to speak with one of our 1031 exchange professionals about your real estate 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved