Attaining full tax deferral is the ultimate goal of a 1031 exchange. In this article, we are going to offer some tips to ensure your 1031 exchange is 100% tax deferred.
Keep an Eye on Your Debt, Equity, and Value
The first thing you need to do is keep an eye on the debt, equity, and value of your transaction. The important thing to remember is you need to go up in these three areas when you exchange into your replacement property. In other words, your replacement property must be equal to or greater than your relinquished property in debt, equity, and value in order to defer 100% of your capital gains taxes.
Don’t Miss Your Deadlines
It’s also essential not to miss your 1031 exchanges deadlines. The 1031 exchange process is governed by strict timelines. Once you start your exchange you only have 180 days to finish your exchange. In addition to that, you have 45 days identification period that runs concurrently with the start of your 180 day exchange period. During this period you have to identify in writing all of your replacement properties for the exchange. If you miss any of these deadlines it puts your entire exchange in jeopardy.
Contact the Intermediaries at CPEC1031, LLC
Contact the qualified intermediaries at CPEC1031, LLC today for help with all the details of your 1031 exchange. Our team of 1031 exchange professionals has decades of experience in the like-kind exchange industry. We have facilitated countless 1031 exchanges just like yours and can help you through all the ins and outs of the process. Give us a call today at our downtown Minneapolis offices to learn more about the 1031 exchange process, its benefits, and how we can help you save money in taxes when selling 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.
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