Section 1031 of the Internal Revenue Code allows any United States taxpayer to defer capital gains taxes on the sale of real estate by rolling their net proceeds into a newer replacement property. But there are a number of rules and regulations you need to abide by in order to complete a successful exchange. Interested in learning more? Contact a qualified intermediary at Commercial Partners Exchange Company today - 612.643.1031.
Maple Grove 1031 Exchanges
In order to avail yourself of the tax-saving benefits of a like-kind exchange, there are several rules you need to follow – as set by the Internal Revenue Code. Listed below are a few of the most important guidelines you need to follow when conducting any 1031 exchange of real property:
Qualifying Purpose. Before you embark on a 1031 exchange, you need to make sure your property qualifies for like-kind exchange treatment. All 1031 property must be held for investment or business purposes (property held for personal use is not allowed).
Like-Kind. Additionally, your relinquished property and your replacement property both need to be like-kind in nature.
Debt, Value, Equity. You also need to keep an eye on your debt, value, and equity ratios. A basic rule of thumb is that your replacement property needs to be greater than your relinquished property in these three areas.
These are the most important – but certainly not the only rules you need to know in a 1031 exchange. For more detailed information, contact a qualified intermediary to discuss the nitty gritty of your like-kind exchange.
Like-Kind Exchanges in Maple Grove, MN
A like-kind exchange can save you a lot of money on capital gains taxes when selling real estate. A qualified intermediary can facilitate the entire 1031 process for you so you don’t miss any deadlines or requirements. Reach out to our qualified intermediaries today to discuss the details surrounding your like-kind exchange of real estate. Our primary office is located in downtown Minneapolis, but we work with clients in Maple Grove and throughout the state of Minnesota.