Don’t Forget These 1031 Exchange Essentials

There are many important things to remember when it comes to 1031 exchanges of real estate. In this article, we’re going to talk about a few 1031 exchange essentials that you should always bear in mind during the like-kind exchange process.

Intent is Key

Before you begin a 1031 exchange, you need to make sure you have the right intent with your property. All property involved in your 1031 exchange needs to be held for investment or business purposes (not personal use). Are you holding your relinquished property with that mindset? Do you plan on using your replacement property for business or investment purposes? These are important questions to consider before you even begin your exchange.

Like-Kind Is Defined Broadly

All property in a 1031 exchange must be like-kind with one another. The good news is that the definition of “like-kind” in the realm of 1031 exchanges is quite broad. Basically all United States real estate is considered like-kind. So as long as your real property is held for investment or business purposes, you can use it in your 1031 exchange.

Get Help with Your Tax-Deferred Exchange of Real Estate

Get the help you need with your tax-deferred exchange of real estate by contacting the qualified intermediaries at CPEC1031, LLC today. With over two decades of experience, we are well suited to help guide you through all the ins and outs of your next 1031 exchange of real estate. Our qualified intermediaries have helped countless people defer taxes with 1031 exchanges and we can help you too! Reach out to our 1031 exchange professionals today to learn more about the 1031 exchange process and how we can help.

• 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

3 Times to Consider a 1031 Exchange

There are many reasons why a taxpayer might engage in a 1031 exchange. In this article, we are going to talk about three times you might want to consider a 1031 exchange of your property.

You Want to Move to a Different Area

All property involved in a 1031 exchange must be like-kind. Thankfully, the definition of like-kind is quite broad and can include investment real estate anywhere in the United States. That means you can use a 1031 exchange to get out of a certain geographic area and into another. Perhaps you want to move your property to a more tax-advantageous state. Or perhaps you are retiring and moving from Minnesota down to Florida and you want to be closer to your investment property. A 1031 exchange is a great option for both of these scenarios.

You Want to Move Out of Management-Intensive Property

1031 exchanges can also be done between different industry sectors. For example, you could exchange a management-intensive property like an apartment complex for a less management-intensive property.

You Want to Defer Your Capital Gains Taxes

Ultimately, 1031 exchanges are about tax deferral. When done correctly, a 1031 exchange allows you to defer your capital gains taxes on the sale of your property. This is a huge benefit for taxpayers who want to keep their money working in a continuation of investment.

1031 Exchange Services in Minneapolis

If you are searching for help with your 1031 exchange, look no further! CPEC1031, LLC has decades of experience working on like-kind exchanges of all types both in Minnesota and across the country. Our team is ready and waiting to help you through all the specifics of your next real estate exchange. We can help prepare your documentation, make sure you are meeting all the 1031 exchange requirements, and get you ready to close on your properties. Reach out to our team of 1031 exchange professionals today at our downtown Minneapolis office to learn more about our services and see how we can help!

• 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

Can You 1031 Exchange from Rental to Retail?

Many taxpayers have questions about what types of property they can and cannot use in a 1031 exchange. In this article, we are going to talk about 1031 exchanging between different industry sectors (rental, retail, agricultural, and beyond!)

1031 Exchanges Between Industry Sectors

One of the greatest benefits of doing a 1031 exchange is that you can exchange out of and into different industry sectors. For example, you can sell a rental property like a duplex and use your sales proceeds to purchase a retail space as your replacement property. So long as your property is like-kind, you can exchange between any industry sector that you wish.

Qualifying Property

It’s important to remember that your property, regardless of what industry sector it’s in, still needs to satisfy the 1031 exchange property requirements. Specifically, it needs to be like-kind and held for investment purposes or for use in your trade of business. Make sure you are meeting these requirements before you dive into your 1031 exchange.

Like-Kind Exchanges in Minneapolis

If you are interested in saving money in capital gains taxes when you sell investment real estate, a like-kind exchange may be a great option for you. CPEC1031, LLC can help you navigate the waters of your 1031 exchange, making sure you have a good grasp of the ins and outs along the way. We can help you achieve the capital gains tax deferral you’re looking for. Contact us today at our downtown Minneapolis office for more information about our services and how we can help you through the details of your next 1031 exchange 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved

Is it Possible to Take Cash Out if Part of the 1031 Exchange Property is Homesteaded?

Recently, we were asked the following question:

• In a 1031 exchange, is it possible to take care out if a portion of the 1031 exchange property is homesteaded?

That’s our topic for today’s article – 1031 exchanges involving property that is part owner-occupied and part business.

Partial 1031 Exchanges

If the relinquished property is part owner-occupied and part business or rental (for example, a duplex that is half rented and half owned-occupied), then the IRC Section 121 principal residence exclusion may apply to the owner-occupied proceeds if you have owned the property and lived in it for at least two out of the proceeding five years.

Additionally, IRC section 1031 may allow for the deferral of gains on the portion of the proceeds that relate to the business or rental part of the property. You can’t buy for a transaction and use both of these preferential tax provisions.

CPEC1031, LLC – Like-Kind Exchange Company

CPEC1031, LLC offers like-kind exchange services to taxpayers throughout the entire United States. Regardless of where your investment property is located in the US, we can help facilitate your exchange under section 1031 of the Internal Revenue Code. Many taxpayers have availed themselves of the tax saving benefits of the 1031 exchange and you can too! Contact our qualified intermediaries today to learn more about the various benefits of like-kind exchanges, whether you are a good candidate for 1031, and how we can help.

• 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 – Consolidating LLCs or Partnerships for a 1031 Exchange

In a 1031 exchange, the general rule is you can’t exchange into that which you already own because that wouldn’t be an “exchange.” But what if you’re in a partnership or LLC and you want to buy out all of the other partners, and you want to use your 1031 exchange funds for that purchase and consolidate 100% of the ownership in your sole name?

Revenue Rule 99-6 is your friend in this scenario. It tells us that when you consolidate 100% of a partnership and make it into a disregarded entity that you’re basically deemed to have acquired the real estate of the exiting partners. This is a great planning tool to consolidate partnerships and take control of the project for yourself.

Defer Capital Gains Taxes with a 1031 Exchange

Defer your capital gains tax bill when selling investment real estate by conducting a 1031 exchange rather than a straightforward sale. CPEC1031, LLC has been working on 1031 exchanges for decades. We can help you through the entire 1031 exchange process – from the sale of your relinquished property to the identification and acquisition of your replacement property. Contact us today to learn more about the many benefits of section 1031 and see how you can save money on capital gains taxes when you sell qualifying 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved