3 Essential Rules for Identifying Your 1031 Exchange Replacement Property

There are many rules and regulations that govern 1031 exchanges of real estate. In this article, we are going to discuss the rules for identifying 1031 exchange replacement property.

How to Identify Your 1031 Replacement Property

In a 1031 exchange, you must re-invest the sales proceeds from your relinquished property into a like-kind replacement property. There are certain restrictions surrounding the number of replacement properties that you can identify. Oftentimes, a taxpayer only wants to identify a single replacement property. But if you want to identify multiple properties, you must satisfy one of the following rules:

• The 3-Property Rule – You can identify up to three replacement properties regardless of their market values.

• The 200% Rule – You can identify any number of replacement properties as long as the aggregate fair market value of all replacement properties does not exceed 200% of the aggregate Fair Market Value (FMV) of all of the relinquished properties as of the initial transfer date.

• The 95% Exception – You can identify any number of replacement properties if the fair market value of the properties actually received by the end of the exchange period is at least 95% of the aggregate FMV of all the potential replacement properties identifiedNOTE: The replacement property received must be substantially the same as property identified within the 45-day limit described above.

Contact a Qualified Intermediary

Contact a qualified intermediary to learn more about section 1031 of the Internal Revenue Code and how it can help you save taxes when selling real estate. The qualified intermediaries at CPEC1031 have over twenty years of experience facilitating 1031 exchanges in Minnesota and across the country! We have all the tools necessary to walk you through your 1031 exchange and ensure you feel comfortable every step of the way. Contact us at our Minneapolis office today to get your exchange started!

• 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved

How to Collaborate Effectively in a 1031 Exchange

Collaboration is an essential element in any successful 1031 exchange. There are numerous parties that need to work in tandem in order for your 1031 exchange to complete on time and without issue. In this article, we are going to discuss the importance of collaboration in a 1031 exchange and how to effectively collaborate with all involved parties.

Work with Your Qualified Intermediary

Your qualified intermediary is your go-to professional for all things related to your 1031 exchange. They will guide you through the process, making sure all of your documentation is accurate and accounted for and that all of your questions are answered.

Work with Your Accountant and/or CPA

It’s important to collaborate with your accountant and/or CPA during the 1031 exchange process as well. You’ll need to report your exchange to the IRS after it occurs, so bringing in your tax advisors can be a great help.

Work with Your Attorney

Finally, it’s a good idea to communicate with your real estate attorney before starting a 1031 exchange. The main benefit of this is to ensure your exchange doesn’t cause any other unforeseen issues.

1031 Exchange Services

At CPEC1031, LLC we have over two decades of experience working with clients on their 1031 exchanges of investment real estate. Our qualified intermediaries can walk you through the details of your like-kind exchange from beginning to end and make sure you have all your bases covered. Contact us today to learn more about our 1031 exchange services and see how we can help you defer your capital gains taxes on the sale of qualifying real property. You can find us at our primary offices located 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved

How to Put Together a Perfect 1031 Exchange

A successful 1031 exchange requires managing a lot of moving parts that need to be handled appropriately in order to complete a successful exchange. In this article, we are going to offer up some tips and tricks for putting together a perfect 1031 exchange of real estate.

Make Sure Your Property Qualifies

Before you start putting things together and starting the 1031 exchange process, you need to make sure your property qualifies for 1031 treatment. Any property used in a 1031 exchange needs to be held for investment or business use. Personal property is disqualified outright from 1031 exchange treatment.

Work with a 1031 Exchange Company Who Sees the Bigger Picture

If you’ve never done a 1031 exchange before, it’s easy to get overwhelmed by the process. That’s where a skilled 1031 exchange company can be a significant help to you. Work with an experienced 1031 exchange company who can see the bigger picture of your 1031 exchange. They will be able to help you arrange everything to set your exchange up for success!

CPEC1031, LLC

If you are interested in learning more about how to save taxes on the sale of real estate, you’ve come to the right place. The 1031 exchange professionals at CPEC1031, LLC have been facilitating 1031 exchanges of all shapes and sizes for the past two decades. Our intermediaries can guide you through the process, manage all of your required documents, and answer any of your questions along the way. Reach out to us today at our downtown Minneapolis offices today to learn more about the 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved

The Importance of Preserving Section 1031

In recent years, there have been several attempts to cap or get rid of the 1031 exchange. In this article, we are going to talk about recent attempts to cap the 1031 exchange and discuss why it’s important to preserve section 1031 of the Internal Revenue Code.

Attempts to Cap Section 1031

In 2021, there were some proposals in Congress to cap the tax-deferral offered by 1031 exchanges at $500,000. This was viewed by many as a very bad idea. Farmers, agricultural real estate owners, and even nature conservancy lobbyists were all opposed to it because 1031 exchanges help move capital around and free up inventory that otherwise wouldn’t get sold. That’s part of what makes it such a valuable tool in the commercial real estate community. Now 1031 exchanges are back on the chopping block with the President’s newest budget proposal.

The Importance of Protecting Section 1031

It's important that we all remain vigilant of any future attempts to cap or remove section 1031 because it’s a wonderful tool that creates jobs, and increases private infrastructure like warehouses, shopping centers, apartment buildings, and more. All of those benefits from section 1031.

Like-Kind Exchanges in Minnesota

At CPEC1031, LLC we have more than two decades of experience in the 1031 exchange industry facilitating like-kind exchanges of all sorts. Our team of 1031 exchange officers can guide you through the like-kind exchange process and answer any questions you have along the way. Reach out to us today to learn more about our like-kind exchange services and see how we can help with your next 1031 exchange of investment 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved

The First Thing to Do When Starting a 1031 Exchange

If you are intrigued by the 1031 exchange process and its benefits but don’t know where to begin, you’ve come to the right place! In this article, we are going to discuss some of the essential first steps you need to take to get your 1031 exchange rolling.

Contact a Qualified Intermediary

The first step you should take in any 1031 exchange is to contact an experience qualified intermediary. Your qualified intermediary is your guide for all things related to your 1031 exchange.

Be prepared to answer the following questions during your initial consultation with a qualified intermediary:

·      How do you own the relinquished property?

·      Is the property vested in your own name, in a trust, or a in business entity?

·      Do you have a spouse in title with you?

·      What's the value of your relinquished property?

·      How much debt do you have encumbering the property?

·      When is your transaction closing?

·      Have you secure a replacement property yet?

There will be more questions your intermediary will ask, but these are just a few to get the ball rolling!

Defer Your Capital Gains Taxes

A 1031 exchange can help you defer your capital gains tax burden when selling qualifying real estate. Learn more about the like-kind exchange process by contacting a 1031 exchange company today. At CPEC1031, LLC our qualified intermediaries have over twenty years of experience working on like-kind exchanges across the country. We can help you through every step of your 1031 exchange. Contact us today at our Minneapolis offices to learn more!

• 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved