Is it Possible to Extend Your 1031 Exchange Time Period?

1031 exchanges of real estate are governed by pretty strict rules about the type of property that can be exchanged, the amount of time a taxpayer has to complete their exchange, and more. But are these rules always hard and fast, or are there exceptions? In this article, we are going to discuss the ways in which you can extend your 1031 exchange period past the standard 180 day deadline.

Standard Time Periods in a 1031 Exchange

In any typical 1031 exchange, the time periods are pretty much set in stone. You have 180 days in total to complete your 1031 exchange (with the first 45 of those days being set aside for identification of your replacement property). Generally, if you miss this deadline, your exchange will fail. But there are a few exceptions to the rule.

Federally Declared Disasters

If your property is in a location that has been declared as a disaster area by the Federal Government (due to a hurricane, flooding, or other natural disaster), you can get an extension on your exchange deadline. This extension is typically 120 days. Be sure to discuss your situation with your CPA to make sure you are eligible for the extension.

Defer Your Tax, Maximize Your Gain!

Get your 1031 exchange off the ground today and start deferring your capital gains taxes on the sale of real estate. The like-kind exchange process can be complicated, but our intermediaries are here to simplify things as much as possible for you. Give our 1031 exchange professionals a call today to learn more about the process and how we work. Our primary office is located in Minneapolis, but we work with clients throughout 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved

Simultaneous 1031 Exchanges Explained

There are several different types of 1031 exchanges of commercial real estate. One such type is known as a simultaneous 1031 exchange. In this article, we explain simultaneous 1031 exchanges of real estate, and discuss when they can be effectively utilized.

What is a Simultaneous 1031 Exchange?

First thing’s first – what exactly is a simultaneous 1031 exchange? In a simultaneous 1031 exchange, the taxpayer sells their relinquished property and immediately acquires their new replacement property simultaneously. This type of exchange is also commonly known as a drop and swap exchange.

Most 1031 exchanges of investment real estate are not set up as simultaneous exchanges. Rather – most 1031 exchanges are delayed exchanges. The reason for this is simple - most taxpayers are unable to synchronize the selling of their relinquished property and the acquisition of their replacement property. In a delayed 1031 exchange you sell your relinquished property, and then acquire your new replacement property at some point during the following 180 day exchange period. Remember, the first 45 days of your exchange period are set aside for identification of the new replacement property. This delayed type of exchange gives taxpayers a lot more flexibility, which is why it’s the preferred method for exchanging investment real estate under section 1031.

Contact CPEC1031, LLC About Your 1031 Exchange

Are you looking to save money on capital gains taxes when selling investment real estate? A 1031 exchange may be a great option for you! Reach out to the commercial real estate professionals at CPEC1031, LLC today to learn more about the process and how we can help facilitate your like-kind exchange. Our 1031 exchange professionals have over twenty years of experience working with clients on all kinds of 1031 exchanges. Let us guide you through 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

How to Finance a Reverse 1031 Exchange of Real Estate

Many people who are considering a reverse 1031 exchange want to know how to get the money to finance their exchange. There are two ways to finance a reverse 1031 exchange.

Out of Pocket vs. Lender Financing

The first option for financing your reverse exchange is to advance the funds out of pocket. The other option is for you to arrange for financing with your lender.

Pros & Cons

If you use bank financing, the exchange company signs the note and mortgage on a non-recourse basis, and you guarantee the debt or cosign the loan. This applies if you are parking the ownership of the replacement property. However if you are parking the ownership of the relinquished property, then the financing with the bank is less complicated.

Contact CPEC1031, LLC Today!

CPEC1031, LLC has been facilitating 1031 exchanges of qualifying real property for more than two decades. Our qualified intermediaries are here to help. We have the knowledge and expertise to help you through your 1031 exchange and defer your capital gains taxes. Contact us today at our Minneapolis office to learn more about our full range of services and see how we can help you through the details of your next like-kind 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved

4 Benefits to Consider with Your 1031 Exchange of Real Estate

There are many beneficial options to consider when exchanging property in a 1031 exchange transaction. In this article, we explain a few benefits to consider with your 1031 exchange of investment real estate.

1031 Exchange Potential Benefits

Below are four potential benefits of a 1031 exchange of investment real estate:

• You can exchange out of a relinquished property in one geographic area, and into a replacement property in another geographic area, so long as both properties are within the United States.

• You can 1031 exchange raw land for income-producing real property.

• You can utilize a 1031 exchange to consolidate multiple properties into one property that is easier to manage.

• You can 1031 exchange out of a management intensive property and into a property that has fewer management fees.

Each of these 1031 exchange options has its benefits. That being said, each 1031 exchange is different and should be treated as such. That’s where a qualified intermediary can help make your 1031 exchange a success. When you work with a qualified intermediary on your 1031 exchange, they can answer all of your questions throughout the exchange process.

Minnesota 1031 Exchange Company

CPEC1031, LLC is a Minnesota-based 1031 exchange company with over two decades of experience in the industry. Our team of qualified intermediaries can walk you through every step of your 1031 exchange, making sure you are fully prepared when it comes time to close. Contact us today at our downtown Minneapolis office to learn more about the full extent of our services and see how we can help you save money in capital gains taxes on the sale of 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

Why You Need to Reinvest the Net Proceeds in a 1031 Exchange

Many people who are looking into doing a 1031 exchange don’t really know how much they need to buy and reinvest in order to defer all of their gains. This article will walk through the basics of performing a successful 1031 exchange.

Buy Up

If you think about it as needing to continue your investment into a like-kind property of equal or greater VALUE and EQUITY, you’ll see that you need to buy a replacement property of roughly equal or more than what you sold your relinquished property for. You are able to net off certain transactional expenses like a realtor commissions, closing costs, etc., but if you want a rough rule of thumb, look at buying a replacement property at a higher price. Many tax problems can be solved by buying a more expensive replacement property.

Cash Can Burn you with Taxes

The next element to look at is you don’t want to have any net proceeds go into your pocket. That cash would burn you with taxes. Remember to redeploy all of that cash (from the sale of your relinquished property) into your new replacement property.

Debt Relief

The last element to think about is debt relief. Any mortgages, liens, deeds of trust that you pay off on the sale of your old property need to be offset by either new debt or cash out of pocket. To summarize, buy a replacement property of greater value, reinvest all of your net proceeds, and offset any debt relief with new debt or additional cash. If you satisfy these rules of thumb, you’ll likely have an effective 1031 exchange.

Contact a Qualified Intermediary to Start Your 1031 Exchange

If you are interested in learning more about the tax-saving benefits of a real estate exchange, contact a qualified intermediary today! At CPEC1031, LLC our intermediaries have over two decades of experience facilitating 1031 exchanges both big and small. We can guide you through the process and make sure you have everything ready when it comes time to close. Contact us today at our downtown Minneapolis offices today to learn more about our 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved