The Importance of Preserving Section 1031

In recent years, there have been several attempts to cap or get rid of the 1031 exchange. In this article, we are going to talk about recent attempts to cap the 1031 exchange and discuss why it’s important to preserve section 1031 of the Internal Revenue Code.

Attempts to Cap Section 1031

In 2021, there were some proposals in Congress to cap the tax-deferral offered by 1031 exchanges at $500,000. This was viewed by many as a very bad idea. Farmers, agricultural real estate owners, and even nature conservancy lobbyists were all opposed to it because 1031 exchanges help move capital around and free up inventory that otherwise wouldn’t get sold. That’s part of what makes it such a valuable tool in the commercial real estate community. Now 1031 exchanges are back on the chopping block with the President’s newest budget proposal.

The Importance of Protecting Section 1031

It's important that we all remain vigilant of any future attempts to cap or remove section 1031 because it’s a wonderful tool that creates jobs, and increases private infrastructure like warehouses, shopping centers, apartment buildings, and more. All of those benefits from section 1031.

Like-Kind Exchanges in Minnesota

At CPEC1031, LLC we have more than two decades of experience in the 1031 exchange industry facilitating like-kind exchanges of all sorts. Our team of 1031 exchange officers can guide you through the like-kind exchange process and answer any questions you have along the way. Reach out to us today to learn more about our like-kind exchange services and see how we can help with your next 1031 exchange of investment 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved

The First Thing to Do When Starting a 1031 Exchange

If you are intrigued by the 1031 exchange process and its benefits but don’t know where to begin, you’ve come to the right place! In this article, we are going to discuss some of the essential first steps you need to take to get your 1031 exchange rolling.

Contact a Qualified Intermediary

The first step you should take in any 1031 exchange is to contact an experience qualified intermediary. Your qualified intermediary is your guide for all things related to your 1031 exchange.

Be prepared to answer the following questions during your initial consultation with a qualified intermediary:

·      How do you own the relinquished property?

·      Is the property vested in your own name, in a trust, or a in business entity?

·      Do you have a spouse in title with you?

·      What's the value of your relinquished property?

·      How much debt do you have encumbering the property?

·      When is your transaction closing?

·      Have you secure a replacement property yet?

There will be more questions your intermediary will ask, but these are just a few to get the ball rolling!

Defer Your Capital Gains Taxes

A 1031 exchange can help you defer your capital gains tax burden when selling qualifying real estate. Learn more about the like-kind exchange process by contacting a 1031 exchange company today. At CPEC1031, LLC our qualified intermediaries have over twenty years of experience working on like-kind exchanges across the country. We can help you through every step of your 1031 exchange. Contact us today at our Minneapolis offices to learn more!

  • 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved

How to Work with Your Qualified Intermediary to Ensure a Successful 1031 Exchange

A qualified intermediary is integral in any 1031 exchange of investment real estate. But the ultimate success of your 1031 exchange depends on how you interact with your qualified intermediary. In this article, we are going to talk about how to work best with your qualified intermediary in order to ensure a successful 1031 exchange of real estate.

Starting the Process As Early As Possible

The first pro tip to remember in any 1031 exchange is to start the process as early as possible. That means you should contact your qualified intermediary at the same time (or even before) you sign the sale agreement for your relinquished property. If you wait until the last minute, it makes things all the more difficult to ensure your 1031 exchange is set up for success.

Information to Provide Your Qualified Intermediary

When you reach out to your qualified intermediary to begin the 1031 exchange process, you will need to provide them with some initial information, including:

  • Your Address

  • Your Social Security Number or Tax ID Number

  • Contact Information for the Title Closer and/or Escrow Company Facilitating Your Closing

  • The Legal Description and Address of Your Relinquished Property

Providing these items right away can help jumpstart the process and set you up for success!

Minnesota 1031 Exchange Company

At CPEC1031, LLC we provide 1031 exchange services to clients throughout the state of Minnesota and across the United States. Our team of qualified intermediaries has over twenty years of experience and can help you through every aspect of your like-kind exchange of real estate. Contact us today to learn more about the 1031 exchange process and how we can help facilitate your next exchange. Find us at our primary office located 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved


Are You a Good Candidate for a 1031 Exchange?

Many real estate investors are curious about the tax-saving benefits of a 1031 exchange. But in some situations, it can be difficult to determine whether or not you are a good candidate for a 1031 exchange. In this article, we are going to talk about how to figure out if your property is a good candidate for 1031 exchange treatment.

How 1031 Exchanges Work

A 1031 exchange is an alternative to a traditional real estate sale in which the taxpayer moves their net proceeds from the sale of one property into a new replacement property. When done correctly, the taxpayer can defer their capital gains taxes on the sale.

How to Determine 1031 Exchange Eligibility

Deferring your capital gains taxes on the sale of investment property sounds great, but not all types of property qualify. Here are a few basic factors that can help determine if your property is a good candidate for 1031 exchange:

  • Qualifying Purpose. All property involved in a 1031 exchange needs to be held for the qualifying purpose of investment or business use. That means personal property cannot be used in a 1031 exchange.

  • Like-Kind Property. All property involve din a 1031 exchange also needs to be like-kind, which includes most real estate.

  • Equity, Value, Debt. In order to successfully defer all of your capital gains taxes, your replacement property also needs to increase in value, equity, and.

Start Your Real Estate Exchange

Still have questions about whether or not your property qualifies for 1031 exchange treatment? Contact the qualified intermediaries at CPEC1031, LLC today to learn more about the process. We have been facilitating 1031 exchanges for over twenty years and can help you through every stage of the like-kind exchange process.

  • 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved

Why Your Relative Can’t Act as Your 1031 Exchange Intermediary

When engaging in a 1031 exchange, it’s always a good idea to work with a qualified intermediary. However, not just anyone can act as your qualified intermediary. In fact, some people are outright disbarred from acting as your qualified intermediary. In this article, we are going to talk about why your relative cannot act as qualified intermediary on your 1031 exchange of real estate.

The Related Party Exclusion Rule

In any 1031 exchange of investment real estate, there are certain parties that the IRS says cannot act as your qualified intermediary. Some of those excluded parties are:

  • Related Parties – anyone related to you by family or blood.

  • Business Agents – anyone directly affiliated with your business affairs (CPA, accountant, attorney, etc.)

  • Your employees

  • Your Realtor

Any party who falls into one of the above categories over the previous two years cannot act as your intermediary.

Find a Qualified Intermediary for Your Exchange

If you can’t work with any related parties, who should you work with on your 1031 exchange? Your qualified intermediary should be an independent third-party who has no previous association with you. It’s best to work with a qualified intermediary who focuses their business solely on facilitating 1031 exchanges.

Contact a 1031 Exchange Intermediary

At CPEC1031, LLC our qualified intermediaries have been helping taxpayers with their 1031 exchanges of investment real estate for more than twenty years. 1031 exchanges are all we do. Contact us today to learn more about the 1031 exchange process and how we can help facilitate your 1031 exchange by acting as qualified intermediary. You can find us at our main office located 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved

Defer the tax. MAXIMIZE your gain.

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