1031 Exchange: Can I Sell Investment Real Estate & Buy Precious Metals?

This is perhaps the most common question we get regarding 1031 exchanges. With the passage of the Tax Cuts & Jobs Act, only real property can now be exchanged for other like-kind real property.

Here is the specific text from section 1031 itself:

In general, No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like kind which is to be held either for productive use in a trade or business or for investment.

CPEC1031 in Minneapolis, MN

At CPEC1031, we have been providing like-kind exchange services to clients throughout the Twin Cities and greater Minnesota for decades. Our qualified intermediaries can help you throughout the entirety of your 1031 exchange. We can advise you on replacement property, prepare your 1031 exchange documents, and answer all of your questions along the way. Contact us today to learn more about the services we offer and how we can help you defer taxes on your next real estate transaction.

• 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.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

Do all States Recognize 1031 Exchanges?

1031 exchanges can be used by any United States taxpayer on property within the United States. However, certain states handle the taxation of 1031 exchanges differently than others. In this article, we are going to talk about the different 1031 exchange treatments that exist in some states.

Federal Tax Code

First of all, it is important to note that section 1031 is a part of the federal tax code. That being said, not all states in the union treat 1031 exchanges the same as the federal government.

California Claw-Back

California is one such state that treats 1031 exchange taxation a little bit differently than other states.

When you do a 1031 exchange, you defer your capital gains taxes on the transaction. You can do this as many times as you want, but if and when you decide to cash out and sell your final property you are subject to capital gains taxes on that sale. In most states, the taxpayer pays these taxes in the state where they sell their final property. In California, the taxpayer is subject to capital gains accrued on California property, even if that taxpayer has since sold their California property and exchanged into property in a different state. This is known as the California “Claw-Back Provision”

If you have any specific questions regarding your exchange and how various state laws may impact it, don’t hesitate to reach out to a qualified intermediary for answers!

Exchange Your Real Property

At CPEC1031, it is our goal to help each and every client through the 1031 exchange process as seamlessly as possible. Our qualified intermediaries have over two decades of experience working with clients in Minnesota and across the United States on their exchanges of real estate. Contact us today to learn more about our like-kind exchange services and get started with one of our intermediaries now. Our main office is located in downtown Minneapolis, but we work with clients all over 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.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

Does a 1031 Exchange Come with any Strings Attached?

A 1031 exchange allows you to defer your capital gains taxes when selling real estate and keep your hard-earned money working for you in a continued investment. That all sounds great, but the first question many people ask is - “What’s the catch?” In this article, we are going to talk about whether or not a 1031 exchange comes with any strings attached.

You’re Deferring Taxes, Not Making them Disappear

A common misconception surrounding 1031 exchanges is that they allow taxpayers to make their capital gains taxes disappear when selling real estate. In reality, you are only deferring these taxes until a later date (i.e. when you decide to sell your replacement property and “cash out”). A like-kind exchange is still a very beneficial tool for taxpayers to save money, but it’s important to understand that you are not completely eliminating your tax burden.

Rules & Regulations

There are also many rules and regulations that you need to abide by in order for your exchange to be recognized as valid by the IRS. You’ve got to be sure to hit your 1031 deadlines, and remember to identify your replacement property in writing.

Let’s Chat!

The qualified intermediaries at CPEC1031 work tirelessly to facilitate real estate exchanges for taxpayers all over the United States. If you’re interested in learning more about the tax-saving benefits of a 1031 exchange, don’t hesitate to reach out to our intermediaries today to set up a time to chat. You can find us at our main office in downtown Minneapolis, or at one of our satellite offices around 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.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

Can I Partially Cash Out in a 1031 Exchange?

Our clients have many questions when it comes to exchanging property under section 1031. Some of the most common questions are on the topic of “cashing out.” In this article, we are going to talk about whether or not you can partially cash out in a 1031 exchange.

Receiving Boot

If you decide to “cash out” or receive boot at any point during your 1031 exchange, you will recognize gain and not be able to defer 100% of your proceeds. Depending on how much boot you receive, this will either result in a partial 1031 exchange, or a completely failed 1031 exchange.

If you find yourself in this situation, there are some options to help you recover, but it’s always best to come to the 1031 table fully prepared. Listen to your qualified intermediary at all times throughout the process so you don’t fall into any traps that will result in less than 100% tax deferral.

Stay Away from Your Proceeds

The best piece of advice we can give you is to stay away from your relinquished property proceeds at all times throughout the process. Allow your intermediary to handle this for you until it’s time to reinvest into your replacement property.

Qualified Intermediaries You Can Trust

At CPEC1031, our trusted intermediaries have been facilitating exchanges of real property for more than twenty years. We can help you through every step of the like-kind exchange process by preparing your 1031 exchange documents, advising you on replacement property, and answering all of your questions. Give us a call today to learn more about our services and how we can help you defer 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.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

Advanced 1031 Exchange Strategies for Deferring Taxes

A 1031 exchange allows you to defer your capital gains on the sale of real property. The key word there is “defer.” Contrary to what many think, this does not mean you get to completely avoid paying taxes on your sale – only that you are deferring your taxes until a later date. But you can use 1031 exchanges to effectively defer your taxes indefinitely. In this article, we are going to discuss some advanced 1031 exchange strategies for a lifetime of tax deferral.

Continuous Tax Deferral

There is no limit to the amount of 1031 exchanges a taxpayer can engage in, so long as these exchanges abide by the rules and regulations set out in section 1031 of the Internal Revenue Code. This means you can essential continue deferring your capital gains taxes when selling your investment real estate until you die. You can even pass this tax deferral onto your heirs after death with the proper estate planning. You just have to keep exchanging up into bigger and better replacement properties – deferring your taxes every step of the way.

CPEC1031

For the past twenty years, our qualified intermediaries have been helping taxpayers with their real estate exchanges. A 1031 exchange allows you to defer your capital gains taxes when you’re selling property. Our intermediaries are ready to help you through all the aspects of the exchange from the sale of your relinquished property to the closing of your replacement property. Give us a call today to set up a time to chat with our intermediaries and get your 1031 exchange off the ground!

•  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.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved