3 Reasons to Hire a Qualified Intermediary for your 1031 Exchange

We’ve talked before about the role of the qualified intermediary in a 1031 exchange. In this article, we are going to offer three reasons why it’s important to work with a qualified intermediary on your 1031 real estate exchange.

They Will Prepare Your 1031 Documents

There are a lot of documents that you need to prepare and execute during the 1031 exchange process. For the uninitiated, this can get complicated quickly. When you hire a qualified intermediary, they will prepare all of your 1031 exchange documents so you don’t have to. That way, you’ll have everything you need when you arrive at the closing table.

They Will Insulate Your From Receiving Boot

In a 1031 exchange, the person completing the exchange cannot receive any of the sales proceeds. Instead, these proceeds need to remain separate until they are rolled over into the new replacement property. Your intermediary can insulate you from receiving these proceeds (boot) by holding the funds until you are ready to close on the replacement property.

They Will Advise You Throughout the Process

A qualified intermediary is a professional who works on 1031 exchange transactions every day. Having this type of experience by your side throughout your exchange is extremely beneficial. Your intermediary will answer all of your questions and advise you throughout the 1031 exchange process.

Start a 1031 Exchange

CPEC1031, LLC works with investors large and small to defer capital gains taxes on the sale of real property. A 1031 exchange is a great tool to keep your money working for you and compounding in a continued investment property. Contact us today to speak with one of our qualified intermediaries about your exchange. We can work with you throughout the entire process, answering your questions, preparing the necessary documents, and make sure you have all your bases covered. Our main office is in downtown Minneapolis, but we work with clients on like-kind exchanges across 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved

How Much Money do You Need to Re-Invest into Your 1031 Replacement Property?

In any 1031 exchange, the taxpayer conducting the exchange needs to re-invest their net proceeds from the sale of their relinquished property into their new replacement property. But how much money do you need to re-invest into the replacement property? This can cause a lot of confusion among taxpayers. In this article, we’ll discuss what exactly you need to re-invest into your replacement property during the course of a 1031 exchange.

Defer All of Your Taxes

If you want to defer 100% of your capital gains taxes in a 1031 exchange, you need to re-invest your proceeds into a property of equal or greater value than your relinquished property. By way of an example, if your relinquished property is sold for $600,000 (with $300,000 equity), you would need to re-invest in a replacement property that has a value of at least $600,000 (with $300,000 equity).

But what if you want to exchange into a replacement property that has a lower value than your relinquished property? In this instance, you would likely face some tax exposure during the exchange. You could also exchange into multiple properties to satisfy this requirement.

Learn How to Save Money on Capital Gains Taxes

CPEC1031, LLC is a full-service 1031 exchange company. We have twenty years of experience facilitating like-kind exchanges for clients under section 1031 of the Internal Revenue Code. Our intermediaries can prepare your 1031 exchange documents and walk you through each and every step of the process. Contact us today to learn more about our like-kind exchange services and how we can help you save money on your next real estate sale. Our main office is located in downtown Minneapolis, but we work with clients from all over 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved

How to Make Your 1031 Exchange as Simple as Possible

1031 exchanges can be complex – especially to those who are unfamiliar with the process. But it doesn’t have to be that complicated! The purpose of this article is to make 1031 exchanges as simple as possible.

Like-Kind Property

1031 exchanges are also commonly called “like-kind” exchanges. That’s because all property in a 1031 exchange needs to be like-kind. Thankfully, like-kind is pretty broad when it comes to real estate.

No Personal Property Allowed

All property involved in a 1031 exchange transaction also needs to be held for business or investment use. Property that’s held primarily for personal use (your primary residence, for example) does not quality for 1031 treatment. Additionally, with the new Tax Cuts & Jobs Act that went into effect on January 1, 2018, personal property is no longer allowed. Only real estate is allowed to be exchanged in a 1031 transaction.

Talk with a Qualified Intermediary

When in doubt, it’s always a good idea to talk with a qualified intermediary about your 1031 situation. An intermediary can simplify the 1031 exchange process for you and make sure your exchange goes off without a hitch.

1031 Exchange Services in MN

The qualified intermediaries at CPEC1031, LLC have twenty years of experience facilitating exchanges of real property throughout the United States. We can help ensure that your exchange progresses without any issues. Give us a call today to set up a time to talk with one of our skilled qualified intermediaries about your 1031 exchange of real property. Our office is located in downtown Minneapolis, but we work with clients throughout Minnesota and 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved

What are the Benefits of 1031 Exchanges other than Tax Deferral?

When it comes to 1031 exchanges of real estate, most people are aware of the tax deferral benefits offered by section 1031. But there are a number of other potential benefits of doing a 1031 exchange that many people are unaware of. In this article, we are going to take a look at some of the benefits of 1031 exchange apart from tax deferral.

Greater Income Potential

Exchangors can sell any appreciated real property and acquire income-producing property with better cash flow and potential appreciation.

Change Property Types

With a 1031 exchange, taxpayers can exchange into different types of investment real estate. For example, taxpayers can exchange from residential to commercial property.

Relocate

Exchange your current property and relocate to a state with greater potential growth or lower tax rates.

Consolidate

Taxpayers who own multiple properties can consolidate by exchanging them into a single property.

Get out of Management Intensive Property

1031 exchanges allow you to exchange out of property that requires a lot of deferred maintenance and into new property that is less management intensive.

Lever Up

Lever up with a 1031 exchange by selling smaller property and stretching your equity out into larger property with greater potential appreciation.

CPEC1031

At CPEC1031, LLC, we are here to help you with your 1031 exchanges of real estate. We have been facilitating exchanges for taxpayers across the United States for over twenty years. Contact us today to discuss the details of your next 1031 exchange of real estate and start realizing the tax-saving benefits of section 1031. You can find us at our primary offices in downtown Minneapolis.

• 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved.

1031 Exchange Considerations with Gifted Property

The big benefit of a 1031 exchange is that it allows you to defer taxes on your capital gains from the sale. Determining your capital gains is an important step in the 1031 exchange process. Unfortunately, with gifted property, determining your gain can be a difficult task. In this article, we are going to discuss 1031 exchanges of gifted property and the various things you need to be aware of with such transactions.

How to Determine Gain with Gifted Property

Let’s say your father gifts a property to you. In this situation, you can take his carry-over basis in the property that accrued over his lifetime. This is the case for property gifted after a person has died. If the gift is made during the person’s lifetime, the calculation may be a little different.

In general, you can determine gain by taking the net sales price of the property and subtracting your basis in the property.

Once you determine the gain, you have the option of deferring that gain with a 1031 exchange, so long as the property has been held for a qualified purpose (investment or business use) and meets the various other 1031 exchange benchmarks.

Real Estate Exchanges & Tax Deferral

At CPEC1031, LLC, our intermediaries have twenty years of experience helping clients defer their taxes on the sale of real property. Our intermediaries can help you prepare your documentation, identify your replacement property, and much more. Reach out to our 1031 exchange professionals today to get your exchange off the ground and start deferring taxes on your next real estate sale. While our primary office is located in downtown Minneapolis, we provide services to taxpayers throughout the state of Minnesota and around 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved