What’s the Best Time of Year to do a 1031 Exchange?

We get a lot of questions from people considering 1031 exchanges wondering when they should conduct their exchange. In this article, we are going to discuss when during a given year you should consider starting a 1031 exchange of real estate.

1031 Exchanges can be Conducted Year Round

1031 exchanges of real estate can be performed at any time of year. There isn’t necessarily a “best” or “worst” time of year to facilitate an exchange. That being said, there may be a time of year that you works better or worse for your unique situation. With that in mind, it’s a good idea to strategize with an intermediary about when to begin your exchange.

Be Cognizant of Deadlines

While you can do a 1031 exchange at any time, it’s a good idea to plan ahead and structure your exchange around your own schedule. You also want to think about your tax filing – especially if your exchange straddles your filing deadline. Consult with your CPA on this aspect.

It’s also essential to remember your 1031 exchange deadlines. Once you sell your relinquished property, you’ve only got 180 days to identify and close on your replacement property. The first 45 days of your 180 day exchange period are set aside for you to identify your replacement property in writing. Keep these deadlines in mind as you prepare to embark on your 1031 exchange.

Simplifying 1031 Exchanges

1031 exchanges seem simple on the surface, but once you get into the weeds, things can get complicated quickly. That’s why it’s always a good idea to have a qualified intermediary by your side throughout the process. At CPEC1031, LLC, our intermediaries have over twenty years of experience working on exchanges of real estate. We have the skills and experience needed to help facilitate your exchange. Contact us today at our office in downtown Minneapolis to learn more and get your 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.

© 2021 Copyright Jeffrey R. Peterson All Rights Reserved

3 Reasons to Consider a 1031 Exchange

There are many reasons why a taxpayer may benefit from a 1031 exchange of real estate, but many people aren’t sure why they should consider a 1031 exchange. In this article, we are going to discuss three reasons you might want to consider a 1031 exchange.

Defer Your Capital Gains

Let’s start with the basics. A 1031 exchange allows you to defer your capital gains taxes when selling real estate. Instead of pocketing the sales proceeds from the sale of a property, you move those proceeds into a replacement property. This allows you to defer your capital gains taxes on the sale and keep your money working for you in a continued investment.

Diversify Your Portfolio

1031 exchanges allow you to get into or out of certain segments of the market. This can help you diversify your portfolio, especially as you get closer to retirement age.

Move to a Different Area

If you are planning to move to a different area and you don’t want to have the burden of managing a property from afar, you can 1031 exchange out of that property and into a new replacement property located closer to where you are moving.

1031 Exchanges with CPEC1031

At CPEC1031, LLC, we specialize in facilitating 1031 exchanges under the Internal Revenue Code. Whether you’re exchanging an apartment complex, a piece or farmland, or another investment property – we have the resources to help you through the 1031 exchange process. Contact us today to learn more about our like-kind exchange services and get your exchange off the ground. Our team can answer all of your questions, advise you on property identification, and even prepare your 1031 documents for you. Find us at our downtown Minneapolis office and reach out to our professionals today!

• 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

4 Replacement Properties Options to Consider for Your 1031 Exchange

Finding the ideal replacement property is one of the most difficult aspects of a 1031 exchange of real estate. In this article, we talk about four replacement property options to consider for your 1031 exchange.

Find a Replacement Property on your Own

Purchase traditional like-kind real property* for investment or business purposes. For example, this could be medical office buildings, industrial property, hotels, malls, retail stores, farm land, multifamily housing or other real properties.

Buy a Tenancy-in-Common Interest

Purchase a syndicated tenant-in-common interest in real property.

Eventually go into an UPREIT

Purchase a syndicated tenant-in-common interest in real property* and later contribute it to an UPREIT (IRC Section 1031 Exchange followed by a subsequent IRC Section 721 contribution of the property to an umbrella partnership real estate investment trust).

Buy a DST

Purchase a beneficial interest in a Delaware Statutory Trust (“DST”)* that holds real property investments.

* If you are purchasing like-kind real property to complete your 1031 exchange, you must designate (identify) your Replacement Property within 45 days after the closing of the sale of your old Relinquished Property. Consult with your advisors early and have a back-up plan in case you are unable to acquire your primary designated replacement property.

• 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

Can 1031 Exchanges be Entirely Tax Free?

1031 exchanges are a great way to save taxes on the sale of real estate. But are 1031 exchanges entirely tax free? That’s our topic for this article. Read on to learn more!

Tax-Free vs. Tax-Deferred

1031 exchanges are not “tax free.” A more appropriate way of saying would be that 1031 exchanges are tax deferred. When you conduct a 1031 exchange, you defer your capital gains tax on the exchanged real estate. That does not mean that the taxes simply disappear. Rather, they are deferred to some point in the future. If at some point down the line you decide to sell the replacement property that you exchanged into, you would then have to pay capital gains taxes on the sale of that property.

1031 Exchange Advisors

CPEC1031, LLC has two decades of experience working with taxpayers all over the country on their 1031 exchanges of real estate. We have the experience and the skills necessary to make sure your exchange meets all the requirements set out by the IRS. We can prepare all your documentation, answer your questions, and advise you every step of the way. Contact us today to learn more about the 1031 exchange or to get your exchange started. Our main office is located in Minneapolis, but we work with clients across the state and 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.

© 2021 Copyright Jeffrey R. Peterson All Rights Reserved

Qualified Intermediary vs. Third-Party Administrator – What’s the Difference?

There are a lot of confusing terms in the realm of 1031 exchanges. Two you may hear quite often are “Qualified Intermediary” and “Third Party Administrator.” In this article, we are going to discuss the distinction between these two common 1031 exchange terms.

Qualified Intermediary

A qualified intermediary is a like-kind exchange expert who assists taxpayers through the 1031 exchange process. Here are a few essential items that a qualified intermediary can help you with during the 1031 exchange process:

• Document Preparation. There are numerous documents that need to be prepared in any 1031 exchange. Attention to detail is paramount on these documents as even a small error can jeopardize your exchange. Your intermediary can prepare all of these documents for you and make sure you’ve covered all your bases.

• Replacement Property Identification. You need to properly identify your replacement property during the 1031 exchange process and your intermediary can help you do that appropriately.

• Answering Questions. Any questions you have throughout the process can be answered by your intermediary.

Third-Party Administrator

A third-party administrator is basically just another term for a qualified intermediary. They mean essentially the same thing and can be used interchangeably. Whatever you call them – qualified intermediary or third-party administrator – it is important to work with one on your exchange.

Continued Real Estate Investment

With a 1031 exchange, you can defer your capital gains taxes on the sale of real estate and, ultimately, keep your hard-earned money working for you in a continued real estate investment. The first step is to work with a qualified intermediary who can walk you through the process, answer your questions, and advise you every step of the way. Contact our 1031 exchange intermediaries today to discuss the ins and outs of your exchange. Our office is located in downtown Minneapolis, but we work with clients 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.

© 2021 Copyright Jeffrey R. Peterson All Rights Reserved