1031 Exchange

Can I Get Out of a 1031 Exchange After Starting the Process?

The simple answer is yes – you can get out of a 1031 exchange after you’ve begun the process. But how exactly do you do that and what are the implications? In this article, we are going to talk about how you can get out of a 1031 exchange after starting the process

The easiest way to back out of your 1031 exchange after it has begun is to simply run out the clock on your 180 day exchange period. After you sell your relinquished property, you have 180 days to complete your exchange. If you fail to identify and exchange into replacement property within that period, your exchange will automatically fail.

Important Considerations

If you intentionally allow your exchange to fail, there are some important considerations to bear in mind. Most importantly, if you’ve already sold your relinquished property and (before your exchange period is up) decide to back out of the exchange, you will then owe capital gains taxes on the sale of your relinquished property. This can result in a potentially hefty tax bill so it’s important to keep that in mind. If you want to defer your capital gains taxes, you should work to salvage the 1031 exchange and complete everything within your 180 day time period.

Contact a Qualified Intermediary at CPEC1031, LLC

Contact one of the qualified intermediaries at CPEC1031, LLC today to get the help you need with your next like-kind exchange of investment real estate. With over twenty years of experience, our team is here to help you through the ins and outs of the 1031 exchange process with the ultimate goal of deferring your capital gains taxes on the sale of your property. Reach out to our team today to get started with your next 1031 exchange and see how we can make the 1031 exchange process as seamless as possible for you. Our primary office is located in downtown Minneapolis, but we work with taxpayers 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved

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Video – Can You Buy a Business with Your 1031 Exchange Funds?

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It’s important to remember that 1031 exchanges are limited to solely real estate. It’s also important to remember that partnership interests are excluded from 1031 treatment as is the good will or going concern of a business.

However, there is a situation in which you can buy an interest in a business and have it qualify for 1031 exchange treatment. That’s when you buy out and consolidate to receive 100% of an entity. Let’s say you’re in a partnership with another individual and you buy out all of that individual’s interest in the partnership, consolidating 100% of the entity in your own capacity – making it a sole-proprietorship. In doing so, you’re deemed to have purchased out the underlying real estate that’s allocable to that other person’s interest in the entity. This comes from revenue rule 99-6. It’s a great way to buy out and consolidate and LLC in one person’s name. It’s also a great way to use up your 1031 exchange funds to buy up a property that you’re already familiar with.

Get Started with the 1031 Exchange Process

Begin your 1031 exchange today by contacting a qualified intermediary at CPEC1031, LLC. With over twenty years of experience, we are well-suited to handle all of the details surrounding your 1031 exchange of investment real estate. We’ve helped many taxpayers throughout the United States with their like-kind exchanges and we can help you with yours. Contact us today to learn more about our numerous service offerings and see how we can help you with your next 1031 exchange. Our team can help you with any type of exchange in any locale throughout 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved

 

1031 Exchange Tips for Beginners

Section 1031 of the Internal Revenue Code can be used by any US taxpayer – from beginners to seasoned professionals. 1031 exchanges may sound easy on paper, but they can get complicated quickly. In this article, we are going to offer up a few 1031 exchange tips for beginners.

Make Sure Your Property Qualifies for 1031 Exchange

Before you do anything else, you need to make sure your property even qualifies for 1031 exchange treatment. First, your property needs to be real estate. Items of personal property are not allowed to be used in a 1031 exchange. Second, you need to make sure you are holding your property for investment or business purposes. Real property held for personal purposes, such as your primary residence, cannot be used in a 1031 exchange.

Don’t Miss Your 1031 Exchange Deadlines

You also need to know that 1031 exchanges are governed by strict time deadlines. Once you begin your exchange, you have just 180 days to complete the process. The first 45 of those days are known as your “identification period.” During that 45-day period you must give written identification of your replacement properties. These are hard deadlines that can only be amended in the rarest of occasions.

Start Your Like-Kind Exchange of Investment Real Estate

Contact CPEC1031, LLC today to start your like-kind exchange of investment real estate. Our skilled intermediaries have more than twenty years of experience facilitating exchanges under section 1031 of the Internal Revenue Code. We can help you through all the stages of your 1031 transaction, answering all of your questions and making sure you understand all the requirements along the way. Reach out to us today at our downtown Minneapolis office to learn more about our services and get started on your next 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved

 

Video – RSVP for a 1031 Exchange Workshop in Rochester, MN

Jeff Peterson here with an important update. We’re putting on a workshop on 1031 exchanges live and in person in Rochester, MN on April 24 at the Rochester Area Foundation. Space is limited and this course is approved for two hours of Continuing Education Credit for real estate agents. It’s going to be a really neat event and we hope to see you there!

  • When: Thursday, April 24, 2025, 9:30AM - 11:30AM (9:00 AM - Check in & Networking)

  • Where: 12 Elton Hills Dr NW, Rochester, MN 55901-3538

Secure your spot by RSVPing at the link below:

  • 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved

How a 1031 Exchange can Keep Your Money Working For You

A 1031 exchange can help keep your money working for you in a continuation of your investment, thus compounding and building your wealth over time. But how exactly does that work?

Keep Your Money Working For You

When you sell investment real estate in a typical, straightforward sale, you are responsible for paying capital gains taxes on the net proceeds you receive. Depending on the size and value of your property, this can add up to a sizeable tax bill which may even make you question whether or not you want to sell your property at all.

Thankfully, there is an alternative option – a 1031 exchange. In a 1031 exchange (aka like-kind exchange), you can defer your capital gains tax burden when selling real estate that qualifies. The catch is you have to reinvest your net proceeds into a replacement property, rather than pocketing the proceeds. The benefits of this are many. You get to defer a potentially huge tax bill when selling your property and you can keep your money working for you in a continued investment.

Get Help with Your Next Like-Kind Exchange

Get the help you need with your next like-kind exchange of investment real estate. CPEC1031, LLC is here to help you through all the aspects of your next 1031 exchange, from beginning to end. Our team of qualified intermediaries can guide you through the like-kind exchange process and ensure you are well prepared when it comes time to close on your property. Let us put our 20+ years of experience to work for you on your next 1031 exchange. Contact us today 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved

Defer the tax. MAXIMIZE your gain.