Can 1031 Exchanges Only Be Conducted by Individual Taxpayers?

While section 1031 is available for use by any United States taxpayer, there are some rules and guidelines in place that govern how 1031 exchanges are conducted. In this article, we are going to talk about what types of entities can conduct 1031 exchanges and how it can be beneficial from a tax perspective.

1031 Exchanges Involving Individual Taxpayers

1031 exchanges are often conducted by individual taxpayers who own investment property (such as a duplex, retail space, farmland, etc.) We work with a lot of individual taxpayers who want to defer taxes when selling their investment property by reinvesting into like-kind replacement property.

1031 Exchanges Involving Other Entities

While 1031 exchanges are often conducted by individual taxpayers, there are many types of entities that can utilize section 1031 for tax deferral. Trusts, LLCs, and corporations can also exchange property under section 1031 of the Internal Revenue Code. The 1031 exchange is a powerful tax-saving tool for business owners and investors alike.

Defer Your Taxes with a Like-Kind Exchange of Real Estate

Defer your capital gains taxes with a like-kind exchange of investment real estate. Section 1031 of the Internal Revenue Code was created to incentivize reinvestment and stimulate the economy. The best part is it’s available for all United States taxpayers to utilize! If you own investment or business property and you’re looking to sell, consider a 1031 exchange to defer your capital gains taxes on the sale. Reach out to the qualified intermediaries at CPEC1031, LLC to learn more about the like-kind exchange process and see how our team can help you through the details of your next 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

What is a Non-Safe Harbor Reverse Construction Exchange?

Section 1031 generally doesn’t allow you to exchange into improvements on land that you already own because you can’t exchange into something that you already have. Thankfully, there’s a creative workaround for this.

Ground Lease Strategy

A ground lease strategy involves creating a new 30+ year ground lease estate on your land. Instead of owning the land, you lease it to your qualified intermediary’s LLC during construction and 1031 exchange into that leasehold, plus the now existing improvements.

This complex type of 1031 exchange requires a team of experts to successfully execute. Be sure to involve your qualified intermediary, your CPA, and your attorney throughout the exchange.

Case Study

A client recently asked: “can I use 1031 exchange proceeds to build rental storage units on my land?”

With proper planning, we explored a leasehold plus construction structure that could open the door to tax deferral while building new income-producing property built to our client’s exact specifications.

The Process

1. Establish the Exchange Accommodation Titleholder (EAT).

2. Create the ground lease and establish a 30+ year leasehold on land you own.

3. Transfer title to the Exchange Accommodation Titleholder (EAT).

4. Provide insurance certificate naming you, the bank (if needed), and the Exchange Accommodation Titleholder (EAT) as insured parties under the liability and property coverage.

5. Construct improvements on the leasehold property.

6. Complete the 1031 exchange into the leasehold plus improvements.

Final Tax Reporting – Close-Out Letter & IRS filing

CPEC1031, LLC issues a final summary letter documenting key dates and utilization of funds. Then, you’ll report the exchange on IRS form 8821 with your tax professional as part of your federal tax return for the year in which the relinquished property is sold.

Find a Qualified Intermediary to Help with Your 1031 Exchange

Find a qualified intermediary near you to help with your next 1031 exchange of real estate. CPEC1031, LLC offers qualified intermediary services to clients throughout the United States. We have more than two decades of experience working on 1031 exchanges. Let us help you through the details of your next 1031 exchange and make sure you are able to get 100% capital gains tax deferral. You can find us at our main offices, which are located in the heart of 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved

Do You Have to Buy A Single Replacement Property?

Many people have questions about replacement properties when conducting a 1031 exchange. A common question we get is: “do you have to buy a single replacement property?” In this article, we are going to dive into the details of that question.

Property Identification

In a 1031 exchange, you need to identify in writing your replacement properties within 45 days after the sale of your relinquished property. Many people simply identify a single replacement property, but you’re not limited to just one.

You can absolutely identify multiple replacement properties so long as you abide by one of the three 1031 exchange property identification rules (3 property rule, 200% rule, 95% rule). As long as you are keeping things within the confines of at least one of those rules, and you have made proper identification within the 4 day window, then you can include multiple properties in your exchange.

Contact CPEC1031, LLC for All Your 1031 Exchange Needs

Contact the team at CPEC1031, LLC for all your 1031 exchange needs! We have over two decades of experience working with taxpayers all over the state of Minnesota and across the United States on their like-kind exchanges. Let us guide you through the like-kind exchange process from beginning to end and defer your capital gains taxes along the way. Reach us at our main office, located in Minneapolis, to set up a time to chat with one of our 1031 exchange specialists about the specifics of 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved 

Are 1031 Exchanges Complicated?

Many taxpayers are interested in 1031 exchanges but are concerned that they may be too complicated to be worth the trouble. In this article, we are going to talk about why this conception of 1031 exchanges exists, and how we work to “uncomplicated” 1031 exchanges for our clients.

1031 Exchanges Made Simple

Not all 1031 exchanges are exactly the same. There are multiple different types of exchanges (forward, reverse, build-to-suit, etc.) that can vary in complexity based on the characteristics of the properties involved. That being said, the underlying framework of a 1031 exchange is pretty simple. You sell a piece of investment property and then reinvest the sales proceeds into a replacement property of equal or greater value, equity, and debt – all while deferring your capital gains taxes.

A qualified intermediary like CPEC1031, LLC can simplify the 1031 exchange process. Our goal with each and every like-kind exchange is to make the process and simple and smooth as possible for our clients.

Find a Qualified Intermediary for Your 1031 Exchange

Find a qualified intermediary for your next 1031 exchange of real property by reaching out to the team at CPEC1031, LLC. We have been in business for decades and have the skills and expertise needed to bring your like-kind exchange across the finish line. Let us handle the details of your 1031 exchange so you can focus on other things. Contact our team today at our downtown Minneapolis office to learn more about the 1031 exchange process, its benefits, and whether your property is a good candidate.

• 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 - Common Structures for 1031 Exchange

In a forward 1031 exchange, the relinquished property sells first and you acquire the replacement property after that.

A build-to-suit exchange is a variation of a forward exchange. In a build-to-suit exchange the relinquished property is sold, and the monies are used by an intermediary to form an LLC and acquire the property on behalf of the taxpayer. The LLC owns the property while the construction occurs and then the intermediary transfers that property within the 180 day period to complete the exchange. That way you get the benefits of the newly constructed improvements plus the cost of the acquisition of the dirt.

In a reverse exchange, typically the intermediary is acquiring the replacement property and holding it as a surrogate for the taxpayer because they haven’t yet sold the relinquished property. Perhaps you have a problem with the buyer of your relinquished property and you’re forced to acquire your replacement property first.

Work with a 1031 Exchange Company Near You

CPEC1031, LLC offers all the resources you need to complete a successful 1031 exchange of real estate. Our team is here to help you through all the details of the 1031 exchange process. We can help ensure that you hit all the required deadlines and benchmarks so that you are able to defer 100% of your capital gains tax burden on the sale of your relinquished property. With over twenty years of experience, we are here to help. Contact us at our downtown Minneapolis offices today to get started 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.

© 2025 Copyright Jeffrey R. Peterson All Rights Reserved