Video – DSTs and 1031 Exchange Property Identification Rules

When you’re doing a 1031 exchange, you need to identify your replacement property within the first 45 days after the date of the relinquished property closing. Most people use the simplest rule (the 3 property rule). However, if you’re going to be identifying a DST (Delaware Statutory Trust), you should be mindful that the trust may be a portfolio of multiple properties. By identifying it you may reach the 3 property rule because its components exceed 3 properties.

Some people use the open third slot on their identification form as an insurance policy – trying to identify property as a fallback just in case the first two options don’t work out. By sliding a DST into that slot, you could blow the 3 property rule if that newly added DST is comprised of multiple assets.

There’s an easy workaround for this. Instead of using the 3 property rule you could use the 200% rule. However, in that case, you need to make sure that the value of all your identified properties doesn’t exceed twice the value of what you sold.

Work with a 1031 Exchange Professional

You can avoid any potential pitfalls like the one described above by working with a 1031 exchange professional at CPEC1031, LLC. Our qualified intermediaries are here to help you with all your like-kind exchange issues. Let us help set your exchange up for success. Contact us today at our Minneapolis office to learn more about our services and get started with your next 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved

1031 Exchange Strategies for 100% Tax Deferral

The ultimate goal of most 1031 exchanges is 100% capital gains tax deferral on the sale of qualifying property. Unfortunately, due to a variety of potential pitfalls, sometimes taxpayers are only able to defer part of their gain. In this article, we are going to talk about a few strategies you can employ to help ensure 100% tax deferral during your 1031 exchange.

Keep an Eye on Your Value, Equity & Debt

In a 1031 exchange, you ideally want to exchange into a replacement property that’s bigger and better than your relinquished property. To that end, it’s important to keep an eye on your value, equity, and debt when looking for a replacement property. If you want to defer 100% of your gains, make sure your replacement property is equal to or greater than your relinquished property in all three of these categories (value, equity, and debt).

Don’t Miss Your Deadlines

The 180 day exchange period is a strict time frame. If you do not complete your 1031 exchange within this time period, your exchange will fail and you won’t be able to defer any of your gains. It’s important to plan ahead and work with a qualified intermediary who can help set you up for success.

Contact a Minnesota Like-Kind Exchange Company

Contact Minnesota like-kind exchange company, CPEC1031, LLC today for help with your next 1031 exchange of real property. Our qualified intermediaries have decades of experience working with taxpayers on all types of 1031 exchanges. You can find us at our primary office in downtown Minneapolis. We work with clients throughout the entire state of Minnesota, as well as the United States at large. No matter where your transaction is taking place, we can help you defer capital gains taxes. Give us a call today to get 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved

Video – How Financial Planners can Talk to Their Clients About the Benefits of 1031 Exchanges

Many clients own physical investment real estate and they no longer want to deal with the troubles associated with that real estate (tenants, toilets, etc.) Financial planners that have Delaware Statutory Trusts (DSTs) that morph into an UPREIT are able to help their clients transition from management-intensive physical real estate into passive, management-free real estate that provides a tax-efficient but still institutional grade quality investment.

If you want help highlighting the benefits of 1031 exchanges to your clients, feel free to reach out to CPEC1031, LLC.

1031 Exchanges in Minneapolis, MN

CPEC1031, LLC is located in Minneapolis, but we work with clients on 1031 exchanges of real estate all across the United States. If you are thinking about starting a like-kind exchange with your property, the qualified intermediaries at CPEC1031 are your go-to resource. We can help you identify your replacement property, prepare all of your documentation for closing, and ultimately defer your capital gains taxes on the sale of your investment real estate. Reach out today to learn more about the exchange process and see how our team can help.

• 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved

Can I 1031 Exchange into a Business (Such as an LLC or a Partnership)?

A common question we get asked is: “can I 1031 exchange into a business, such as an LLC or partnership?”

1031 Exchanges and Business Property

The good will of a business is generally excluded from 1031 treatment.

Partnership interests are generally excluded from 1031 treatment.

According to concepts in Rev. Rul. 99-6 and as applied to 1031 exchanges, one can be deemed to have received real property by means of receiving an assignment consolidating 100% of the membership interest in a single-member LLC (an entity that holds title to real property for 1031 purposes), so that the entity is disregarded for federal income tax purposes...and 100% owned by the taxpayer completing the exchange. The portion of the underlying real property corresponding to the part ownership entity that was not owned previously can constitute real property for 1031 purposes.

Purchase of a partnership interest that results in actual termination of the entity is treated as an “asset” purchase (of the underlying real property assets) with respect to the portion purchased.

McCauslen v. Commissioner,45 T.C. 588 (1966)

The sole owner of an LLC, which is disregarded for tax purposes, is in the same position economically as if he/she had taken title in his/her own individual name. Ltr Rul9751012.https://www.irs.gov/pub/irs-wd/1048025.pdf

Another Authority is: Reg Section 301.7701-2 and 3.

Exchange Your Investment Property & Defer Your Capital Gains Taxes

Under section 1031 of the Internal Revenue Code, you can exchange your investment property for like-kind replacement property and defer your capital gains taxes in the process. At CPEC1031, LLC we are here to help you with all things related to your 1031 exchange. We have more than two decades of experience in the 1031 exchange industry and can put our experience to work on your next like-kind exchange. Bring your questions to a skilled intermediary at CPEC1031 today. You can find us at our downtown Minneapolis office.

• 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved

Can I Get Out of a 1031 Exchange After Starting the Process?

The simple answer is yes – you can get out of a 1031 exchange after you’ve begun the process. But how exactly do you do that and what are the implications? In this article, we are going to talk about how you can get out of a 1031 exchange after starting the process

The easiest way to back out of your 1031 exchange after it has begun is to simply run out the clock on your 180 day exchange period. After you sell your relinquished property, you have 180 days to complete your exchange. If you fail to identify and exchange into replacement property within that period, your exchange will automatically fail.

Important Considerations

If you intentionally allow your exchange to fail, there are some important considerations to bear in mind. Most importantly, if you’ve already sold your relinquished property and (before your exchange period is up) decide to back out of the exchange, you will then owe capital gains taxes on the sale of your relinquished property. This can result in a potentially hefty tax bill so it’s important to keep that in mind. If you want to defer your capital gains taxes, you should work to salvage the 1031 exchange and complete everything within your 180 day time period.

Contact a Qualified Intermediary at CPEC1031, LLC

Contact one of the qualified intermediaries at CPEC1031, LLC today to get the help you need with your next like-kind exchange of investment real estate. With over twenty years of experience, our team is here to help you through the ins and outs of the 1031 exchange process with the ultimate goal of deferring your capital gains taxes on the sale of your property. Reach out to our team today to get started with your next 1031 exchange and see how we can make the 1031 exchange process as seamless as possible for you. Our primary office is located in downtown Minneapolis, but we work with taxpayers across 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved