How to Save a Failing 1031 Exchange

When a 1031 exchange fails, it may seem like the end of the world. But don’t give up! There are options for salvaging a 1031 exchange. A popular option for rescuing a failed 1031 exchange is the Deferred Sales Trust. In this article, we are going to talk about how a Deferred Sales Trust (or DST for short) can help you rescue a failed 1031 exchange of real estate.

Avoiding a Failed 1031 Exchange

The first thing you want to do is take all the necessary precautions to avoid a failed 1031 exchange in the first place. The best way to do that is to begin preparations for your 1031 exchange well in advance and to involve a qualified intermediary early in the process.

Most 1031 exchanges fail because the taxpayer receives taxable boot during the process, fails to complete the exchange within the 180 day deadline, or does not accurately identify their replacement property. An intermediary can help you avoid all of these costly errors.

The Deferred Sales Trust Alternative

Even if your exchange fails, you are not completely out of luck. Converting your failed 1031 exchange into a Deferred Sales Trust is a great alternative method for deferring your taxes on the sale of real estate.

Hire a Qualified Intermediary

Hiring a qualified intermediary is an essential first step in any 1031 exchange. At CPEC1031, LLC, our intermediaries have more than two decades of experience working with taxpayers conducting 1031 exchanges of real estate. We can help you prepare for your exchange by putting together the necessary documents and answering all of your questions. Contact us today to learn more about how we can help you defer taxes on the sale of your real property. Our primary office location is in downtown Minneapolis, but we work with clients throughout the state of 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.

© 2021 Copyright Jeffrey R. Peterson All Rights Reserved

How to Use 1031 Exchanges to Compound Wealth

A 1031 exchange can be an excellent tool for building wealth over the long term. In this article, we are going to discuss how a 1031 exchange can help you compound wealth over time.

A Typical Sale

In a typical sale of real estate, the seller is responsible for paying capital gains taxes on the net proceeds from the sale. Depending on the value of the property, this can be a sizable tax bill that the seller has to bite the bullet on. Sometimes this potential capital gains tax bill is so high it can discourage property owners from selling.

The 1031 Exchange Alternative

Section 1031 of the Internal Revenue Code provides an excellent, tax-advantageous alternative to selling property outright. In a 1031 exchange, the seller does not keep their net proceeds. Instead, they reinvest those net proceeds into a new replacement property that is higher in value, equity, and debt compared to their relinquished property. When done correctly, the taxpayer is able to defer their capital gains taxes on the sale.

This allows you to avoid a potentially huge tax bill and also keep your money working for you – compounding interest over time in your new replacement property investment.

Your One-Stop Shop for All Things 1031 Exchange

At CPEC1031, LLC, we provide comprehensive 1031 exchange solutions to all of our clients. With twenty years of experience under our belt, you can trust us with the facilitation of your like-kind exchange. Our qualified intermediaries can prepare all of your necessary documentation, advise you on replacement properties, and answer all of your questions. Contact us today to learn more about the 1031 exchange process and to get your like-kind exchange off the ground. 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.

© 2021 Copyright Jeffrey R. Peterson All Rights Reserved

How to Defer Capital Gains when Selling Real Estate

No one enjoys paying capital gains taxes when selling real estate. Thankfully, there are several tools available to US taxpayers for deferring or avoiding these capital gains taxes. In this article, we are going to discuss a few ways to avoid capital gains taxes on the sale of real estate.

1031 Exchange

Perhaps the best tool for avoiding capital gains taxes is the 1031 exchange. Under section 1031 of the Internal Revenue Code, a taxpayer is able to defer their capital gains taxes on the sale of real property so long as they roll those proceeds into a bigger property. There are numerous other benchmarks that need to be met, but when done properly, a 1031 exchange can result in 100% capital gains tax deferral.

Alternative Options

If, for some reason, you can’t do a 1031 exchange on your property, you still have some potential alternative strategies, including:

• Claiming a Principal Residence Exclusion

• Deferred Sales Trust

• Gifting Property

Defer Your Capital Gains Tax

If you are looking to defer your capital gains tax on the sale of real estate (and who isn’t), consider a 1031 exchange. At CPEC1031, LLC, our qualified intermediaries have more than twenty years of experience helping taxpayers across the country with their real estate exchanges. We can help you through every step of the exchange process – from start to finish. Reach out to us today to set up your 1031 exchange and defer your capital gains taxes.

• 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.

© 2021 Copyright Jeffrey R. Peterson All Rights Reserved

What’s the Best Time of Year to do a 1031 Exchange?

We get a lot of questions from people considering 1031 exchanges wondering when they should conduct their exchange. In this article, we are going to discuss when during a given year you should consider starting a 1031 exchange of real estate.

1031 Exchanges can be Conducted Year Round

1031 exchanges of real estate can be performed at any time of year. There isn’t necessarily a “best” or “worst” time of year to facilitate an exchange. That being said, there may be a time of year that you works better or worse for your unique situation. With that in mind, it’s a good idea to strategize with an intermediary about when to begin your exchange.

Be Cognizant of Deadlines

While you can do a 1031 exchange at any time, it’s a good idea to plan ahead and structure your exchange around your own schedule. You also want to think about your tax filing – especially if your exchange straddles your filing deadline. Consult with your CPA on this aspect.

It’s also essential to remember your 1031 exchange deadlines. Once you sell your relinquished property, you’ve only got 180 days to identify and close on your replacement property. The first 45 days of your 180 day exchange period are set aside for you to identify your replacement property in writing. Keep these deadlines in mind as you prepare to embark on your 1031 exchange.

Simplifying 1031 Exchanges

1031 exchanges seem simple on the surface, but once you get into the weeds, things can get complicated quickly. That’s why it’s always a good idea to have a qualified intermediary by your side throughout the process. At CPEC1031, LLC, our intermediaries have over twenty years of experience working on exchanges of real estate. We have the skills and experience needed to help facilitate your exchange. Contact us today at our office in downtown Minneapolis to learn more 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.

© 2021 Copyright Jeffrey R. Peterson All Rights Reserved

3 Reasons to Consider a 1031 Exchange

There are many reasons why a taxpayer may benefit from a 1031 exchange of real estate, but many people aren’t sure why they should consider a 1031 exchange. In this article, we are going to discuss three reasons you might want to consider a 1031 exchange.

Defer Your Capital Gains

Let’s start with the basics. A 1031 exchange allows you to defer your capital gains taxes when selling real estate. Instead of pocketing the sales proceeds from the sale of a property, you move those proceeds into a replacement property. This allows you to defer your capital gains taxes on the sale and keep your money working for you in a continued investment.

Diversify Your Portfolio

1031 exchanges allow you to get into or out of certain segments of the market. This can help you diversify your portfolio, especially as you get closer to retirement age.

Move to a Different Area

If you are planning to move to a different area and you don’t want to have the burden of managing a property from afar, you can 1031 exchange out of that property and into a new replacement property located closer to where you are moving.

1031 Exchanges with CPEC1031

At CPEC1031, LLC, we specialize in facilitating 1031 exchanges under the Internal Revenue Code. Whether you’re exchanging an apartment complex, a piece or farmland, or another investment property – we have the resources to help you through the 1031 exchange process. Contact us today to learn more about our like-kind exchange services and get your exchange off the ground. Our team can answer all of your questions, advise you on property identification, and even prepare your 1031 documents for you. Find us at our downtown Minneapolis office and reach out to our professionals today!

• 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.

© 2021 Copyright Jeffrey R. Peterson All Rights Reserved