The Benefits of 1031 Exchanges of Raw Land

1031 exchanges allow you to defer your capital gains tax burden on the sale of real estate. What many people don’t realize is that you can do 1031 exchanges of raw land, in addition to constructed properties. In this article, we are going to explain some of the benefits of 1031 exchanging raw land.

Raw Land Exchanges

1031 exchanges are governed by section 1031 of the Internal Revenue Code. They allow taxpayers to defer their capital gains taxes when selling real estate, as long as certain guidelines are met. All property involved in a 1031 exchange must be held for investment or business use – rather than personal use. It’s also important to note that you only have 180 days to complete your exchange once you start the process. If you satisfy all the requirements of a 1031 exchange you can defer your capital gains taxes on the sale. Over the long-run, your investment property will compound. If you wish to sell that replacement property at any point in the future, you can consider doing another 1031 exchange to keep the investment ball rolling!

You can also utilize raw land in a construction exchange (aka a build-to-suit exchange) in which you construct improvements to the property and include those in the exchange.

CPEC1031, LLC

CPEC1031, LLC is dedicated to helping taxpayers save money in capital gains taxes when selling investment real estate. Our 1031 exchange intermediaries have two decades of experience helping taxpayers with their 1031 exchanges. Let us put our experience to work for you on your next exchange of real property. We can walk you through the entire process and make sure you are informed and comfortable all along the way. You can 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

How to Know if You Have Enough Time to do a 1031 Exchange

Timing is an important issue in any 1031 exchange. There are essential deadlines you must hit in order to complete a successful 1031 exchange of real estate. In this article, we are going to explain how to know if you have enough time to do a 1031 exchange of real estate.

1031 Exchange Deadlines & Timeframes

In nearly every 1031 exchange of real estate, you have a total of 180 days from the start of your exchange to the finish. That means you have to sell your relinquished property and acquire your replacement property within 180 days. Additionally, the first 45 of those 180 days are set aside as your identification period during which you must identify in writing your replacement properties.

Don’t Wait Until the Last Minute

It’s a general best practice to not wait until the last minute to start a 1031 exchange. If you wait until the eleventh hour, it may be too late to get everything lined up for your exchange. Reach out to a qualified intermediary early on in the process.

Start a 1031 Exchange Today

If you’re ready to start your 1031 exchange of real estate, you’ve come to the right place! At CPEC1031, LLC our team of qualified intermediaries has been facilitating 1031 exchanges of all kinds for over two decades. We can help you through all the ins and outs of your 1031 exchange and make sure you have all the details covered. Contact us at our primary offices located in downtown Minneapolis to learn more about our services and how a 1031 exchange can help you save money in capital gains taxes.

• 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

Pro Tips for 1031 Exchanging Property in Different Industries

The 1031 exchange is a powerful and versatile tool that allows a taxpayer to exchange into and out of property in different sectors of the commercial real estate market. In this article, we are going to offer up some pro tips for 1031 exchanging property in different industries.

Like-Kind Real Property

All property involved in a 1031 exchange needs to be like-kind in order to qualify for tax-deferral. The good news is that like-kind is very broadly defined when it comes to real property. As long as your real property is held for investment or business purposes, it is most likely like-kind to any other real property held for a qualifying purpose. That means you can sell a relinquished property in one sector of the marketplace, and exchange into a replacement property in a totally different sector, as long as all the other requirements are met.

A 1031 Exchange Example

Let’s explain this further by examining a hypothetical example. Imagine you own a duplex that you want to sell in a 1031 exchange. You could sell that duplex and exchange into a replacement property in the same industry (perhaps into a triplex or four-plex), or you could exchange it for property in a completely different industry (a motel for example).

Contact a Qualified Intermediary

If you’re interested in learning more about the tax-saving benefits of a 1031 exchange, contact CPEC1031, LLC today. Our qualified intermediaries have over twenty years of experience facilitating 1031 exchanges of all stripes. Our team of professionals can guide you through the process and make sure your exchange is a success. Contact us today at our downtown Minneapolis offices to learn more about the process and see if you are a good candidate for a like-kind exchange 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved

How Real Estate Closing Agents can Properly Handle 1031 Exchanges

Real estate closing agents need to be aware of a lot of different elements when facilitating the closing process. When an involved property is part of a 1031 exchange, things get even more complicated. In this article, we are going to discuss how real estate closing agents can properly handle 1031 exchanges of investment real estate.

Contact the Parties Involved

Despite our recommendations, taxpayers often want to jump on the 1031 exchange train very late in the process – perhaps right before they are set to close on a property. If nobody has made arrangements for a 1031 exchange and it’s time to close on the property, time is of the essence.

As a closing agent, the best course of action is to contact the party that intends to do the 1031 exchange and ask them the following questions:

• Is the property you are selling your 1031 exchange relinquished property?

• Have you started the 1031 exchange process with a qualified intermediary?

These two basic questions will give us the pertinent information needed to facilitate the closing of the 1031 exchange property.

Contact CPEC1031, LLC

Contact CPEC1031, LLC today to learn more about the 1031 exchange process and how you can defer capital gains taxes on the sale of real estate. We have been facilitating 1031 exchanges of real property for over two decades. Let us put our experience to work for you on your next 1031 exchange. We can answer all of your questions and prepare all of your documents to ensure your exchange is a success. Reach out to our team today to start your 1031 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved

3 Essential Rules for Identifying Your 1031 Exchange Replacement Property

There are many rules and regulations that govern 1031 exchanges of real estate. In this article, we are going to discuss the rules for identifying 1031 exchange replacement property.

How to Identify Your 1031 Replacement Property

In a 1031 exchange, you must re-invest the sales proceeds from your relinquished property into a like-kind replacement property. There are certain restrictions surrounding the number of replacement properties that you can identify. Oftentimes, a taxpayer only wants to identify a single replacement property. But if you want to identify multiple properties, you must satisfy one of the following rules:

• The 3-Property Rule – You can identify up to three replacement properties regardless of their market values.

• The 200% Rule – You can identify any number of replacement properties as long as the aggregate fair market value of all replacement properties does not exceed 200% of the aggregate Fair Market Value (FMV) of all of the relinquished properties as of the initial transfer date.

• The 95% Exception – You can identify any number of replacement properties if the fair market value of the properties actually received by the end of the exchange period is at least 95% of the aggregate FMV of all the potential replacement properties identifiedNOTE: The replacement property received must be substantially the same as property identified within the 45-day limit described above.

Contact a Qualified Intermediary

Contact a qualified intermediary to learn more about section 1031 of the Internal Revenue Code and how it can help you save taxes when selling real estate. The qualified intermediaries at CPEC1031 have over twenty years of experience facilitating 1031 exchanges in Minnesota and across the country! We have all the tools necessary to walk you through your 1031 exchange and ensure you feel comfortable every step of the way. Contact us at our Minneapolis office today to get your exchange started!

• 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