1031 Exchanges Made Simple

1031 exchanges of real estate can be complex, but we do our best to simplify the process whenever possible. In this article, we are going to strip the 1031 exchange down to its most basic elements for easy consumption.

Like-Kind

1031 exchanges are also commonly known as “like-kind” exchanges. That’s because all property involved in a 1031 exchange needs to be like-kind, as designated by the IRS. Thankfully, like-kind is pretty simple when it comes to real estate, as most real property is considered like-kind to most other real property.

Investment or Business Use

Another important thing to remember is that your 1031 exchange property needs to be held for the appropriate use. Specifically, your property needs to be held for investment, or use in your trade / business. Property held primarily for personal use does not qualify for 1031 treatment.

Boot

Boot is any non-like-kind property that the taxpayer receives during an exchange. Receiving boot will trigger taxavle gain. The best way to avoid boot is to hire a qualified intermediary for your exchange so they can insulate you from receiving any taxable boot.

1031 Exchange Professionals

Get started with your 1031 real estate exchange by contacting a qualified intermediary. At CPEC1031, our intermediaries have two decades of experience and can help you through every step of your exchange – from start to finish. No matter what type of property you’re selling, a like-kind exchange is a great tool for deferring your capital gains taxes and keeping your money working for you in a continued investment. Reach out to us today at our downtown Minneapolis office to chat with our team of intermediaries about your exchange.

• Start Your Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

Timing Rules of a 1031 Exchange

When you’re doing a 1031 exchange of real estate, timing is everything. There are specific deadlines you have to abide by, and if you fail to do so, your exchange may be unsuccessful. In this article, we are going to offer a brief refresher on the timing rules associated with a 1031 exchange of real estate.

Basic Time Frames

First and foremost, there are some basic deadlines you need to be aware of in any 1031 exchange. You have a total of 180 days to finish your exchange (starting when you sell your relinquished property). Those first 45 days are your identification period, in which you need to identify in writing the replacement properties you wish to exchange into.

Exceptions to the Rule

While these time periods are pretty steadfast, there are some situations in which circumstances change. The IRS wants you to report your replacement property on the same tax return as your relinquished property. So depending on when you begin your 1031 exchange, you may only have until your federal tax filing deadline to complete your exchange.

Like-Kind Exchange Services

At CPEC1031, we provide like-kind exchange services to clients in Minnesota and across the country. It doesn’t matter if you’re a huge investor, or you’ve never sold real estate before in your life – a 1031 exchange can help you defer capital gains taxes when you sell real property. Our qualified intermediaries have over two decades of experience and can help facilitate your like-kind exchange under section 1031 of the Internal Revenue Code. Contact us today to set up a time to chat with one of our qualified intermediaries about your 1031 real estate exchange.

• Start Your Exchange: If you have questions about 1031 exchange timing rules, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

Will the New Tax Law Lead to an Increase in 1031 Exchanges?

There have been a lot of questions surrounding the Tax Cuts & Jobs Act over the past several months. We’re going to continue exploring the ramifications of the TCJA on 1031 exchanges. In this article, we are going to talk about whether or not the new tax law will lead to an increase in 1031 exchanges moving forward.

Real Estate Exchanges

The new Tax Cuts & Jobs Act preserved the 1031 exchange as part of the GOPs tax overhaul. That was welcome news to real estate investors who understand the true benefit of the 1031 exchange as an investment tool and economic driver. Since there were no massive changes to 1031 exchanges of real estate with the new law, one might predict that exchanges of real property will remain relatively steady moving forward.

Goodbye Personal Property Exchanges

The opposite is true for 1031 exchanges of personal property. As we’ve mentioned before, personal property exchanges got the axe with the passage of the TCJA. That means personal property 1031 exchanges will not be allowed moving forward (as of January 1, 2018).

1031 Intermediaries

At CPEC1031, we help clients defer their capital gains tax on the sale of real estate using section 1031 of the Internal Revenue Code. We have been facilitating exchanges across the country for more than twenty years, and have the experience needed to help you through your transaction. We can prepare all of your documents for and advise you of your options every step of the way. Contact us today to speak with one of our skilled 1031 exchange qualified intermediaries.

• Start Your Exchange: If you have questions about 1031 exchanges and the TCJA, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

3 Helpful Online Resources for Your Next 1031 Exchange

1031 exchanges of real property can be complex, and the more resources you have at your disposal – the better off you’ll be. In this article, we are going to offer up a few helpful online resources that you can use during your next 1031 exchange of real estate.

Capital Gains Calculator

Deferring capital gains taxes is the number 1 reason to do a 1031 exchange for most people. But how much money will you actually defer with your exchange?

Use our free online calculator to determine your potential capital gains tax burden.

1031 Exchange Glossary

There are many terms that fly around during a typical 1031 exchange: boot, constructive receipt, like-kind. For those who haven’t done a 1031 exchange before, things can quickly get confusing.

Check out our extensive glossary of 1031 exchange terms.

45 / 180 Day Calculator

All 1031 exchanges have to be completed by set deadlines. In general, you have 180 days total to complete your exchange, with the first 45 of those days set aside as the time to identify your replacement property.

Use our free online calculator to determine your 1031 exchange deadlines.

Contact a Minnesota Qualified Intermediary

The qualified intermediaries at CPEC1031 have been helping investors or all sizes with their like-kind exchanges of real estate for decades. If you are considering a 1031 exchange of real estate, we can help you prepare the necessary documents, answer your questions, and advise you throughout the process. Reach out to us today to speak with one of our highly skilled 1031 intermediaries and get the ball rolling on your exchange!

• Start Your Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

1031 Exchanges & Financial Planning

1031 exchanges can be a great tool to use as you plan for your financial future. This article is all about 1031 exchanges and financial planning. Here are a few ways 1031 exchanges can play an integral role in financial planning:

• Exchange into less management intensive property. If you currently own a management intensive property like an apartment complex, a 1031 exchange is a great way to exchange out of that property and into a different property that is less management intensive.

• Defer Your Capital Gains Tax. If you have a piece of property that you’re looking to sell, a 1031 exchange is a great way to avoid capital gains taxes on the sale of that property, while keeping your money working for you in a continued investment.

Consult with Your Financial Planner

It goes without saying that every person’s situation is different and should be treated as such. Before you make any decisions, be sure to consult with your financial planner to discuss how a 1031 exchange may fit into your financial plan.

Get Started with Your 1031 Exchange

A 1031 exchange is a great tool for deferring your capital gains taxes on the sale of real estate. But there are many potential traps for the unwary. A qualified intermediary can advise you on your exchange and make sure you don’t fall victim to any such traps during the course of your 1031 exchange. Reach out to us today to get your 1031 exchange started. Our primary office is located in the heart of downtown Minneapolis, but we work with clients across the Twin Cities, Minnesota, and the entire United States.

• Start Your Exchange: If you have questions about how a 1031 exchange might fit into your financial plan, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved