How to Know if You’re in the 1031 Exchange Strike Zone

Before you conduct a 1031 exchange, you need to make sure that your property falls within the IRS strike zone for qualified property. In this article, we are going to talk about the 1031 exchange strike zone and whether your property falls within it.

Property Within the Strike Zone

The 1031 exchange strike zone is a set of criteria that govern what exactly qualifies for 1031 exchange treatment. Here are a few types of property that fall within the strike zone:

• Like-kind real estate that is held primarily for investment or business purposes.

Property Outside the Strike Zone

Here are some examples of property that exist outside the 1031 exchange strike zone:

• Real property used primarily for personal purposes – such as your primary residence or lake cabin. These are for personal use, not investment or business purposes.

• Personal property such as artwork, aircraft, and more are no longer considered eligible for 1031 exchange treatment.

• Property held primarily for resale – including flipped houses.

Defer Taxes with a 1031 Exchange

CPEC1031, LLC has been helping taxpayers defer their capital gains taxes when selling real estate for more than twenty years. Our intermediaries have the skills and experience to facilitate your exchange from start to finish. We will advise you, answer your questions, and prepare your required documents for closing. Contact our office today in downtown Minneapolis to chat with one of our intermediaries about your exchange. With a 1031 exchange, you can defer your taxes and keep that money working for you in a continued investment!

• 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.

© 2021 Copyright Jeffrey R. Peterson All Rights Reserved

Tips for Reporting Your 1031 Exchange to the IRS

Reporting your 1031 exchange to the IRS is an essential step in the exchange process. But many investors aren’t sure how to appropriately report their exchange. In this article, we are going to discuss how to properly report your 1031 exchange to the IRS.

IRS Form 8824

1031 exchanges should be reported using IRS form 8824. This form is a sort of worksheet that explains to the IRS the details of your exchange – your relinquished property, your replacement property, etc.

It is important to file this form so that the IRS is aware that you are conducting a 1031 exchange. Otherwise they may think that you still owe taxes. When you sell a piece of real estate (your relinquished property), the title company that closes the transaction is required to report the sale to the IRS on a 1099. If you fail to file form 8824 detailing your exchange, the IRS is likely to think that you have not paid your capital gains taxes on the sale.

It’s always a good idea to involve your CPA in this process, as they will know your tax situation best.

St. Paul 1031 Exchange Company

If you are considering a like-kind exchange of real property, your first step should be to consult with a qualified intermediary about your transaction. A skilled intermediary can help you wrap your head around the exchange, advise you on your best property options, and prepare all of your 1031 documents for closing. At CPEC1031, LLC, we have twenty years of experience helping clients with their 1031 exchanges. Contact us today at our downtown Minneapolis office to learn more about the exchange process and get started with your 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.

© 2021 Copyright Jeffrey R. Peterson All Rights Reserved

How Long Do You Have to Complete Your 1031 Exchange?

Timing is an important factor in any 1031 real estate exchange. In this article, we are going to talk about how much time you have to complete a typical 1031 exchange of real estate.

Standard Time Frames

The answer to the question at hand largely depends on where you are in the 1031 exchange process. Have you already sold your relinquished property? Are you still in the planning stages? These are all important questions to take into consideration.

As we have discussed before, there are some standard time frames that you need to follow when conducting a 1031 exchange of real estate. The big numbers you need to keep in the back of your mind are 180 and 45. You have a total of 180 days to complete your exchange, starting when you sell your relinquished property. If your exchange is not complete by midnight of the 180th day, your exchange will fail and you will not be able to defer your capital gains taxes. You also have the first 45 days of your exchange period in which to identify your replacement property.

You can calculate your 1031 exchange deadlines and time frames with our free online calculator.

1031 Exchange Facilitators

Section 1031 of the Internal Revenue Code is available to all US taxpayers and can significantly reduce the amount of taxes owed on the sale of real estate. If you are at all interested in the tax-deferral benefits of a like-kind exchange, contact the qualified intermediaries at CPEC1031, LLC. With over twenty years of experience, our 1031 exchange facilitators have the knowledge and experience needed to guide you through every step of your exchange. Contact us today at our office in downtown Minneapolis to set up a time to chat with our team of 1031 exchange professionals.

• 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

Here’s What You Need to Start a 1031 Exchange

Exchanging property under section 1031 of the Internal Revenue Code can lead to significant tax deferral when done correctly. However, many taxpayers who want to do a 1031 exchange don’t know where to start. In this article, we’re going to talk about the process of getting a 1031 exchange started, and the information you need to gather before you begin the process.

Initial Information

The first thing you need to do is gather some initial information that you can send to your qualified intermediary in order to begin the process. Here’s some initial information you should get together:

• Your contact info – name, DOB, phone, etc.

• Relinquished property info – projected closing date, value / debt / equity of the property, how you hold title to the property, the original purchase price, etc.

• Replacement property into – how you plan to take title to your new replacement property, the amount / type of debt on the new replacement property, etc.

This is just the tip of the iceberg, but this information will be enough to get the ball rolling. Your qualified intermediary will work with you throughout the exchange and request additional information when needed.

1031 Exchange Property

With a 1031 exchange, you can defer your capital gains taxes when you sell a piece of real property. This can really add up and result in a significant amount of tax savings when selling real estate. But 1031 exchanges aren’t as easy as many taxpayers think. We’ve seen many taxpayers go into an exchange without the necessary preparation, only to have their exchanges fail. That’s why it’s essential to work with a qualified intermediary who can advise you, prepare your documents, and walk you through each step of the exchange process. Contact us today to speak with our 1031 exchange intermediaries about your 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved

What Types of Property are Barred from 1031 Exchange Treatment?

Not all property can be exchanged in a 1031 transaction, and it’s important to know the distinction between acceptable property and excluded property. The recent Tax Cuts & Jobs Act brought additional changes to section 1031 and what property is allowed. In this article, we are going to talk about the property that cannot be exchanged in a 1031 transaction.

Personal Property is Excluded

The Tax Cuts & Jobs Act, which went into effect a couple of years ago, preserved 1031 exchanges of real estate, but got rid of 1031 exchanges of personal property. That means you cannot do a 1031 exchange involving any items of personal property. The following is a list of some personal property items that can no longer be exchanged in a 1031 transaction:

• Aircraft

• Artwork

• Gold Coins

• Livestock

• Business Equipment

Other Property Benchmarks

There are also other benchmarks you have to satisfy with your 1031 exchange property. The property involved in the exchange needs to be held for use in your trade or business, or for investment purposes. Property that you hold for personal use (such as your primary residence) will not qualify for 1031 treatment.

1031 Exchange Help

If you are searching for help with your 1031 exchange, you’ve come to the right place! The qualified intermediaries at CPEC1031, LLC can help you through every stage of your exchange – from the sale of your relinquished property to the closing of your replacement property. With more than two decades of experience under our belt, we have the skills needed to help you. Contact us today to learn more about the like-kind exchange process and get your exchange up and running! Our primary office is located in downtown Minneapolis, but we work with clients throughout Minnesota and 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