Section 1031 of the Internal Revenue Code can be used by any US taxpayer – from beginners to seasoned professionals. 1031 exchanges may sound easy on paper, but they can get complicated quickly. In this article, we are going to offer up a few 1031 exchange tips for beginners.
Make Sure Your Property Qualifies for 1031 Exchange
Before you do anything else, you need to make sure your property even qualifies for 1031 exchange treatment. First, your property needs to be real estate. Items of personal property are not allowed to be used in a 1031 exchange. Second, you need to make sure you are holding your property for investment or business purposes. Real property held for personal purposes, such as your primary residence, cannot be used in a 1031 exchange.
Don’t Miss Your 1031 Exchange Deadlines
You also need to know that 1031 exchanges are governed by strict time deadlines. Once you begin your exchange, you have just 180 days to complete the process. The first 45 of those days are known as your “identification period.” During that 45-day period you must give written identification of your replacement properties. These are hard deadlines that can only be amended in the rarest of occasions.
Start Your Like-Kind Exchange of Investment Real Estate
Contact CPEC1031, LLC today to start your like-kind exchange of investment real estate. Our skilled intermediaries have more than twenty years of experience facilitating exchanges under section 1031 of the Internal Revenue Code. We can help you through all the stages of your 1031 transaction, answering all of your questions and making sure you understand all the requirements along the way. Reach out to us today at our downtown Minneapolis office to learn more about our services and get started on your next exchange!
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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