We often get into the weeds with specific and intricate 1031 exchange details on this site. But today we’d like to take a step back and talk about 1031 exchanges from a general perspective. This article acts as a 1031 exchange guide for dummies. We’ll discuss the basics of a 1031 exchange for those who have very little knowledge of this powerful tax tool.
1031 Exchange – the Basics
Let’s talk briefly about how the 1031 exchange process works. The ultimate goal of a 1031 exchange is to defer your taxes on the sale of investment real estate. You do this by taking your net proceeds from the sale of real property and reinvesting them into like-kind replacement property. When done correctly, you are allowed to defer 100% of your capital gains taxes on the sale.
Timelines
You are restricted by some deadlines in a 1031 exchange. You only have 180 days in total to complete your exchange. The first 45 of those days are your identification period in which you have to identify in writing the replacement properties you want to exchange into. These are hard, fast deadlines that have to be met in order to ensure the success of your 1031 exchange.
Like-Kind Exchange Guidance
If you’re looking for guidance on your like-kind exchange, you’ve come to the right place. The qualified intermediaries at CPEC1031 have twenty years of experience working with clients on their 1031 exchanges. Let us help you prepare all your documents, answer your questions, and advise you on replacement property. Reach out to our team of intermediaries today to set up a time to chat about your exchange. You can find us at our main office in downtown Minneapolis, or at one of our satellite offices 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.
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