1031 Exchange Deadlines & Your Federal Tax Filing

In any 1031 exchange, you have 180 days from the start of your exchange to the finish of your exchange. However, this can get complicated by your federal income tax filing deadline.

If you start your 1031 exchange late in the year, you will find that your exchange period actually ends not at the 180th day after starting your exchange, but at the due date for the filing of your federal tax return. Let’s say you started your exchange on December 31st and you’re a partnership that files taxes on March 15th. In this situation you’re not going to get the full 180 day time period to complete your exchange unless you file an extension for your federal tax return. The same thing applies to individuals who file on April 15th. This is a real trap for the unwary.

I tell real estate agents to notify the other professionals that are in the client’s sphere (including the accountant) to let them know about the 1031 exchange so they can file for an extension if need be. The left hand and the right hand need to be working together and the advisors of the 1031 taxpayer need to be in lockstep throughout the process.

Minnesota 1031 Exchange Company

CPEC1031, LLC is a Minnesota-based 1031 exchange company that provides qualified intermediary services throughout the state and across the country. Our team of 1031 professionals has more than twenty years of experience working with taxpayers on their 1031 exchanges. We can help prepare your 1031 documents and answer all of your 1031-related questions before, during, and after the process. Contact us today to learn more about our 1031 exchange services and see how we 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

Video – Can I do a 1031 Exchange with Foreign Real Estate?

You can do a 1031 exchange of US property for US property. You cannot do a 1031 exchange of foreign property for US property. Strangely you can also do a 1031 exchange of foreign property for foreign property. Let’s say that you own commercial real estate property in New Zealand, and you want to sell that property and purchase a new property in Australia. You can do a 1031 exchange with those properties. You might ask, “why would I bother doing a 1031 exchange in this situation?”

Remember, US taxpayers are taxed on their income regardless of where it’s derived. Even if your income is derived from a foreign real estate transaction, you must pay taxes on that transaction in the United States. A 1031 exchange can help you defer those taxes.

Defer Your Capital Gains Taxes by Reinvesting Your Proceeds

A 1031 exchange under section 1031 of the IRC allows you to defer capital gains taxes by reinvesting the sales proceeds into a like-kind replacement property of equal or greater value. This is an extremely powerful tax tool used by big and small investors alike! Anyone can avail themselves of the tax-saving benefits of the 1031 exchange. To get your exchange rolling, contact a qualified intermediary at CPEC1031, LLC today. We can explain the like-kind exchange process to you, answer any of your questions, and guide you through each stage.

  • 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 – What If My Replacement Property Costs Less Than My Relinquished Property?

If your 1031 exchange relinquished property closed for $1 million, in total all your replacement properties should be at least $1 million if you want to defer all of your capital gains taxes. If your replacement property is worth $900K, you’re going to recognize gains on that $100,000 buy down in value. In this scenario, you could purchase one replacement property for $900K, and a second replacement property for $110K. Between the two of those properties, you have a greater value than your relinquished property and would be able to defer your capital gains taxes in a 1031 exchange.

This is where a DST can be used as a sort of “gap filler” because you can tailor that purchase to fit your needs. If it’s a leveraged DST, you’re not paying a dollar for every dollar of value – you’re getting some credit for the underlying debt. As a result, you may be paying out less than you would pay out in taxes on the boot if you were to buy down. If you buy an 85% leveraged DST, that’s only going to cost you 15 cents on the dollar to make up that gap. But the effective taxes on a $100K buy down might be almost 50%. What would you rather do – give 50 cents on the dollar to the state of Minnesota and federal government, or instead give 15 cents on the dollar to your stock broker who is going to put that money in a security that might be worth something some day? The money that you pay out in taxes will never come back to you. The money that you give to your stock broker to put in a DST probably will.

CPEC1031, LLC – An Experienced 1031 Exchange Company

CPEC1031, LLC is an experienced 1031 exchange company with decades of time working in the 1031 exchange industry. Our team facilitated like-kind exchange transactions in Minnesota where we are based, and across the entire United States. No matter where your 1031 property is located, we can assist you in deferring your capital gains taxes. Reach out to our team of 1031 exchange professionals today to see how we can help you through the many details of your next 1031 exchange. We 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

Video – The Basics of a 1031 Exchange

In the Internal Revenue Code, there is a provision called section 1031. This code section says that if you structure your transaction not as a taxable sale, but as a swap, you can dispose of your appreciated real estate you’ve held for investment or business purposes and exchange it for other like-kind property that’s also going to be held for investment or business purposes.

There are two parts to this litmus test:

  1. You must exchange into “like-kind” property. The definition of like-kind in the realm of section 1031 is very broadly construed. Pretty much any real estate in the United States is considered like-kind. An exception to that would be shorter term leases. If you have an airport hangar, it’s probably on a 10-year ground lease. In order for a leasehold estate to be considered like-kind you need to have at least 30 years remaining on that lease, including unexercised options for renewal.

  2. Both the relinquished property and the replacement property have to be held for a qualified purpose. In the world of 1031 exchanges, qualified purpose means that your intent must be to hold the property for investment or for use in your trade or business.

Find a Qualified Intermediary for Your Next 1031 Exchange

Reach out to CPEC1031, LLC today to find a qualified intermediary for your next 1031 exchange of investment or business real estate. We have more than two decades worth of experience under our belts. During that time, we’ve worked on all types of 1031 exchanges (forward, reverse, build-to-suit, etc.) and can work with you through the entire process. Contact us today to learn more about the tax-deferral benefits of a 1031 exchange of real estate and see how we can help. You can find us at our Twin Cities office in 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

Video – Triple Net Lease: A DST Alternative

DSTs – syndicated properties that can only be sold to accredited investors as securities – are very popular right now. While DSTs can be great, they’re difficult for some investors to exchange into and can’t be utilized by everyone.

An alternative to the DST is the Triple Net Lease. I had a client back in the 1990s who would buy Arby’s locations on a triple net basis when nobody wanted to buy them. He had transitioned from management intensive apartments in South Minneapolis to triple net leased Arby’s locations. Eventually he sold those and 1031 exchanged into gas stations in Iowa.

The point is that there are alternatives to the securitized products offered by financial services firms. They are not identical in risk, however. With a triple net lease deal, you have a lot of eggs in one basket. If your tenant decides not to do what they’re supposed to do, then the value of the property will likely decline. You need to look at the value of the property in case it ever needs to be repurposed.

Defer Your Taxes with a 1031 Exchange of Investment Real Estate

Defer your capital gains tax burden by conducting a 1031 exchange of your investment real estate. As long as your property is held for investment purposes or for use in your trade or business, you are eligible for 1031 exchange treatment. Doing a 1031 exchange instead of a straight forward sale means that you get to defer the capital gains taxes on the sale and reinvest those proceeds into a bigger, better replacement property that will continue to compound over time. Reach out to CPEC1031, LLC today to learn more about the like-kind exchange process and see if you are 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

Defer the tax. MAXIMIZE your gain.

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