In this article, we are going to discuss some best allocation practices when selling a business or real property in a 1031 exchange.
Best Allocation – Sale of Business / Real Property
The first place to start is to drill-down on the value (or price) allocated to the real property, the amount of remaining debt on the property and the current adjusted basis on the real property. If you can allocate to the non-real estate components a price that is close to the remaining basis in the good will and personal property, then you may be able to increase the tax efficiency and defer more of the gains on the overall sale.
It’s always a good idea to involve your CPA in the discussion as well to determine the best allocation strategy for your situation.
CPEC1031, LLC
At CPEC1031, we are dedicated to providing the best possible services to our clients. Over the course of our decades in the industry we have built up a reputation as the professionals in commercial transactions. Let us put our experience to work for you on your transaction. Contact us today to learn more about the services we provide and how we can help. Our main office is located in downtown Minneapolis, but we work with clients across the United States.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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