Why First-Time Investors Should Consider 1031 Exchanges

1031 exchanges are available to all US taxpayers – from seasoned veterans to first-time investors alike. In this article, we are going to explain why first-time investors should consider doing a 1031 exchange.

Grow Your Portfolio with a 1031 Exchange

A 1031 exchange is a tax-efficient vehicle for growing your portfolio. Here are some of the many benefits of conducting a 1031 exchange:

  • Defer Your Taxes. 1031 exchanges are also known as tax-deferred exchanges because they allow you to defer your capital gains taxes on the sale of qualifying real estate.

  • Leverage Your Equity. Trade up into a bigger and better replacement property and leverage your existing equity.

  • Move Your Property. A 1031 exchange is a great way to move from one geographic area or industry segment into another. You can exchange into a property located in a more tax-advantageous state, or into a completely different sector of the market.

If you own investment property (whether it’s a rental property, a retail property, a large commercial property, or something else), consider a 1031 exchange as a way to defer taxes on the sale of your property and keep your money working for you in a continued investment.

Like-Kind Exchange Services

A 1031 exchange can help any owner of investment real estate defer their capital gains taxes on the sale of said real property. In order to defer your gains, however, you need to meet specific benchmarks throughout the process. That’s where a qualified intermediary can help. The intermediaries at CPEC1031, LLC have been assisting taxpayers for more than two decades with their 1031 exchanges. We work with clients across the United States on all types of exchanges – forward, reverse, and build-to-suit. Let us handle the details of your next 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved

 

Why It’s Important to Find the Best Qualified Intermediary for Your 1031 Exchange

Finding the right qualified intermediary is essential in a 1031 exchange. It’s important to work with a qualified intermediary who has the skills needed to facilitate your particular transaction. However, many people don’t know why it’s important to work with the perfect intermediary. In this article, we are going to explain why it’s essential to work with a skilled intermediary on your next 1031 exchange of real estate.

The Importance of Working with a Skilled Intermediary

The first question many taxpayers ask is: “why is it important to work with a skilled intermediary on my 1031 exchange?” A qualified intermediary performs many important tasks throughout the course of a 1031 exchange. They can prepare all of your 1031-related documentation (and provide it to the relevant parties). They can answer your questions about the process and make sure you are never in the dark. They can insulate you from receiving any taxable proceeds when selling your relinquished property. These are just a few of the numerous reasons why it’s important to work with a skilled intermediary.

Qualified Intermediary Services

A 1031 exchange intermediary can help you through the process of deferring your capital gains taxes with a like-kind exchange. At CPEC1031, LLC we have been providing qualified intermediary services for more than two decades. Let us help you through the like-kind exchange process and ensure that you are able to defer 100% of your capital gains tax burden. Contact our team of 1031 exchange professionals today to learn more about the various benefits of conducting a 1031 exchange and see how we can help you through the 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved

Can You Pocket Cash at Any Point During a 1031 Exchange?

Many taxpayers ask if they can take out any cash during the 1031 exchange process. In this article, we are going to talk about whether or not you can pocket cash at any point during a 1031 exchange.

Taxable Boot

If you pocket any cash at closing or during any point during your 1031 exchange, that would be considered taxable “boot.” You can do it if you wish, but you would have to pay capital gains taxes on that cash boot. Keep your hands off the net proceeds throughout the process to defer 100% of your gains.

Partial Exchange

In most situations, the goal of a 1031 exchange is 100% tax deferral. However, there are some instances in which a partial exchange might be acceptable or even preferable. For example, if you have prior loss carryovers, you may be able to offset a partial recognition of gains from taking some cash as taxable boot or from buying down in value on the replacement property purchase.

Find a 1031 Exchange Professional

Find a 1031 exchange professional near you and get your like-kind exchange off the ground today. At CPEC1031, LLC we have over two decades of experience facilitating 1031 exchanges of all shapes and sizes for clients in Minnesota and across the country. Our qualified intermediaries are here to help you through the entire exchange process, from start to finish. We can answer all your questions, help you find suitable replacement property, and make sure you are meeting all the requirements set out by section 1031 of the IRC. Contact us today 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved

3 Key Benefits of a 1031 Exchange

Taxpayers conduct like-kind exchanges for various reasons, depending on their specific situations. Indeed, there are many benefits provided by section 1031 of the Internal Revenue Code, but many people are unaware of these benefits. In this article, we discuss three key benefits of doing a 1031 exchange of real estate.

Tax Deferral

A 1031 exchange allows you to keep your money working for you in a continuation of your investment. If you dispose of a property in a traditional, straight-forward sale, you will need to recognize and pay capital gains taxes on the net proceeds from that sale. A 1031 exchange offers you a tax-advantageous alternative in which you can defer those gains by reinvesting your proceeds into a replacement property of equal or greater value.

Growth

By leveraging the proceeds from your relinquished property sale, you can accelerate the growth of your wealth. By doing so, a 1031 exchange can help compound your wealth over time as you (potentially) continue to exchange into bigger and better properties.

Flexibility

1031 exchanges give you the flexibility to upgrade, diversify, or reposition your assets. You can exchange into and out of different geographic regions and industries. For example, you can sell a retail space in Edina, Minnesota and exchange into an apartment complex in Houston, Texas.

Tax-Deferred Exchange Company

CPEC1031, LLC helps taxpayers with tax-deferred exchanges under section 1031 of the Internal Revenue Code. We have been helping people with their 1031 exchanges for over twenty years and we can help you too! Contact us today to learn more about the like-kind exchange process and see if your property qualifies for 1031 exchange treatment.

  • 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 – Section 1033 Timelines

Section 1033 is very similar to section 1031 of the Internal Revenue Code. However, section 1033 provides for an exchange period that’s completely different than that of section 1031. Under 1033 you can suffer a loss (such as from theft, storm destruction, or from government seizure or condemnation). What is the replacement period in the context of a 1033? The date of your loss (under destruction or theft) would start the period under that scenario. But in the context of seizure, the process can actually start when there’s the first eminent threat.

So your replacement period can actually commence even before you’ve received any consideration. It can begin when the threat of seizure occurs.

What about the end of the period? The 1033 period typically ends two years after the close of the year in which you received the first payment from which you realized income. That being said, in the case of real estate that is held for investment or business purposes, your period can be extended to three years. 

Like-Kind Exchange Company – CPEC1031, LLC

CPEC1031, LLC is a like-kind exchange company working to facilitate 1031 exchanges and 1033 exchanges in Minnesota and across the country. With over two decades of experience, we are well-suited to help you through the process of deferring taxes through a 1031 exchange of real estate. We can help prepare documentation, safeguard your funds, and answer all of your questions about the process. We’ve helped countless taxpayers with their 1031 exchanges. Let us help you too. Contact us today at our Minneapolis office and get started with your next 1031 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

 

Defer the tax. MAXIMIZE your gain.