Video – How Does the Section 121 Exclusion Work?

Under section 121, there is an ownership test and a use test, and they don’t have to happen concurrently. For example, you may have rented and lived in a property for 24 months and then bought the property but moved out of and owned it for another 24 months. Your use and your ownership don’t have to be concurrent.

Section 121 applies to your primary residence. Your exclusion amount is $500,000 for married couples filing jointly ($250,000 for individuals) of profit under this provision.

Consider this scenario: you buy a property, live in it for a year, then rent it for three years, and subsequently return and live there for a year. As long as you make less than your exclusion amounts listed above, you won’t have any tax because you lived in the property as your primary residence for 24 months out of the previous five years.

Find the Right Qualified Intermediary for Your Next Like-Kind Exchange

A qualified intermediary can help you defer capital gains taxes with a like-kind exchange. However, it’s important to find the right intermediary for your particular exchange. Not all qualified intermediaries provide the same services or the same quality of services. At CPEC1031, LLC we are well-verse in all types of 1031 exchanges – from forward exchanges to reverse exchanges and everything in between. We have been working with clients on their 1031 exchanges for more than two decades. Give us a call today to discuss the intricate details of your unique 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

How a 1031 Exchange Can Help You Work Smarter, Not Harder

If you own a management intensive property (like a duplex or apartment building) and want to get out of it, a 1031 exchange might be your ticket to working smarter, not harder. These types of management intensive properties bring all sorts of headaches like dealing with tenants, maintenance calls, and more.

If you find yourself in this position, you’ve worked hard to get there. But at a certain point, you need to start thinking about how you can make your wealth work for you and not the other way around.

With a 1031 exchange, you can transition from management intensive property to institutional-grade, management-free real estate and defer your capital gains tax burden in the process. Here are just a few of the benefits of exchanging into management-free real estate in a 1031 transaction:

• You get the same real estate benefits without the management headaches

• You preserve and grow your wealth over time while deferring capital gains tax

• You can spend time enjoying life, rather than managing properties

Preserve your hard-earned equity by harnessing the power of the 1031 exchange!

Exchange Your Real Estate in a 1031 Transaction

In a 1031 exchange transaction, you can exchange your real estate for like-kind real estate and defer your capital gains taxes in the process. Section 1031 of the Internal Revenue Code is an extremely powerful tax provision that many taxpayers have been utilizing for decades. The good news is you can use it too! Section 1031 is available for any United States taxpayer to use. But you must ensure that you are following all the guidelines in order to defer your capital gains taxes. That’s where a qualified intermediary comes in. At CPEC1031, LLC our intermediaries can handle all the details of your exchange so you can rest easy.

• 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

Is a Cooperation Clause Necessary in a 1031 Exchange?

If you are considering a 1031 exchange, you may ask yourself if you need to include a cooperation clause in your purchase agreement. That’s a great question – read on to learn more about cooperation clauses in 1031 exchange transactions.

The Benefits of a Cooperation Clause

The short answer is that a cooperation clause in your purchase agreement is not mandatory, but it is a best practice in a 1031 exchange. Including a cooperation clause in your purchase agreement can save you time, money, and anxiety because it protects both sides of the deal.

If you are the seller in a 1031 exchange, a cooperation clause informs the buyer:

• You are doing a 1031 exchange

• Your rights will be assigned to a 1031 intermediary

• The buyer will sign an acknowledgement that they have received notice of these intentions

On the flip side, if you are the buyer in a 1031 exchange, a cooperation clause informs the seller:

• You are completing a 1031 exchange

• Your rights will be assigned to a 1031 intermediary

• The seller will have to cooperate with the 1031 exchange process and sign an acknowledgement that they have received notice of the buyer’s intention to conduct a 1031 exchange

Anyone Can Defer Taxes with a 1031 Exchange

Any United States taxpayer that owns qualifying real estate can conduct a 1031 exchange and defer their capital gains taxes on the sale. Section 1031 has been part of the tax code in one form or another for a hundred years. Take advantage of the tax saving benefits of section 1031 by contacting a qualified intermediary at CPEC1031, LLC to learn more about the like-kind exchange process and get started. We have more than twenty years of experience facilitating exchanges of real property across the country.

• 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 – 1031 Exchanges of Vacant Land

Many taxpayers own raw or vacant land that they are holding for appreciation. Perhaps they think that land is in the pathway for development 5-10 years out and that it will be worth a lot of money some day.

You can do a 1031 exchange on property that is costing you money to own (due to the property taxes and insurance costs), but it’s important to ask yourself how you own the property. Did you inherit it in a trust? Did you acquire it as a part of an entity or individually?

There are a lot of questions to answer before you get started. Generally speaking, individual owners who are tenants-in-common and have owned the property for investment or business purposes can each do 1031 exchanges on their separate sales of their fractional interest in the real estate.

A Qualified Intermediary Can Help You with Your 1031 Exchange

If you’re interested in learning more about the tax deferral benefits of a 1031 exchange of your investment real estate, a qualified intermediary can help. A qualified intermediary is a neutral third party that can insulate you from receiving any taxable “boot” during the exchange process. They can also help prepare documentation, coordinate with your tax advisor, and answer any questions you might have throughout the 1031 exchange process. Contact the intermediaries at CPEC1031, LLC today to learn more about the exchange process and get the ball rolling with 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

Video – Do I Need a Qualified Intermediary for a Simultaneous Exchange?

If two parties are doing a simultaneous 1031 exchange, you don’t technically need to use a qualified intermediary. However, it’s often still a prudent practice to use a qualified intermediary in a simultaneous exchange because that’s how the IRS has become accustomed to seeing these exchanges reported. Additionally, the qualified intermediary structure provides a certain formality and uniformity to the process.

This is perhaps even more important when there are differences between the two parcels being sold. If the values being swapped are not identical, that means one party is going to need to be made whole by adding cash to the transfer. Another factor is that if one property has debt on it and the other doesn’t, that debt has to be extinguished in order to convey marketable title. Using a qualified intermediary helps soften the rough edges of the transaction and provides a uniform way of dealing with any discrepancies in value, equity, and debt.

Defer the Tax and Maximize Your Gain with a 1031 Exchange

A like-kind exchange under section 1031 of the Internal Revenue Code allows you to defer your capital gains taxes and maximize your gain when selling qualifying real property. At CPEC1031, LLC we have decades of experience in the 1031 exchange industry and have performed countless exchanges of all shapes and sizes, from forward exchanges, to reverse exchanges, to build-to-suit construction exchanges. Reach out to our team of 1031 exchange professionals today at our Twin Cities office to get started with 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