The real estate market is white hot right now, with no concrete signs of slowing down. With values at peak levels, we’re seeing a lot of taxpayers 1031 exchange their property instead of doing an outright sale in order to defer their capital gains taxes on the property.
Exchanging Into Different Business Segments
On the 1031 exchange front, we see a lot of taxpayers selling lots of smaller assets that they likely acquired prior to the great recession. These properties have now seen huge increases in value and strong demand. Many of these taxpayers want to get out of these more management-intensive, one-off investments and consolidate into bigger and better properties. These new properties may be in a better location for the taxpayer, or in an entirely different business segment. Maybe they’re getting out of the single-family rental business and 1031 exchanging into mini-storage or something that’s a little less management intensive.
That is the true beauty of the 1031 exchange. Because nearly all investment real estate is considered “like-kind” for 1031 exchange purposes, you can exchange into and out of entirely separate business segments and still defer your capital gains taxes on the sale.
1031 Exchanges of Real Property
A 1031 exchange can save you a lot of money when selling real estate by allowing you to defer your recognition of capital gains taxes on the sale. But in order to do so you need to satisfy certain benchmarks. At CPEC1031, LLC our entire team is dedicated to facilitating 1031 exchanges. Let us help you through the ins and outs of your next like-kind exchange of real property. Contact us at our downtown Minneapolis offices to learn more about our full array of services.
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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