Many people have questions about doing 1031 exchanges involving property that they’ve refurbished. In this article, we will discuss whether or not you can do a 1031 exchange with refurbished property.
It’s All About Mental Intent
When it comes to 1031 exchanges of refurbished property, it’s all about mental intent. When you initially purchased the refurbished property, were you intending to flip it or hold it for investment purposes? All property involved in a 1031 exchange must be held for investment or business purposes, so this is an essential question. Typically, the longer you hold onto a property before selling it in a 1031 exchange, the safer you’ll be.
Short Holding Periods
If you are considering a 1031 exchange with a property that you’ve held for a short time period, it’s important to consult with your tax advisor or CPA to discuss your options. It’s important that you are able to substantiate that your intention was to hold the property for investment purposes. This can be proved via advertisements you placed showing the property was being listed for rent, or even correspondences in which you articulate your intent to hold the property for investment purposes.
Get Help Deferring Your Capital Gains Taxes
Get the help you need in deferring your capital gains taxes via a 1031 exchange by working with a qualified intermediary you can trust. At CPEC1031, LLC our like-kind exchange professionals have twenty years of experience facilitating exchanges under section 1031 of the Internal Revenue Code. It doesn’t matter how simple or complex your exchange is – we have the resources to help. Contact us today at our Minneapolis offices to learn more about our services and see how we can help you defer taxes on the sale of 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.
© 2024 Copyright Jeffrey R. Peterson All Rights Reserved