Like many types of real estate transactions, a 1031 exchange is a delicate balancing act. If even one element is off kilter it can throw the entire like-kind exchange out of whack. In this article, we offer some tips for finding the right balance in your 1031 exchange.
Be Mindful of Your Equity, Value & Debt
It’s important to remember that there are three specific categories in which your 1031 exchange needs to be balanced: equity, value, and debt. When you’re searching for a replacement property, it’s important to make sure that it is equal to or greater than your relinquished property in these three categories (equity, value, and debt). If your replacement property is out of balance with your relinquished property in these categories, it can throw your exchange off and you may not be able to defer all of your capital gains tax burden. A qualified intermediary can help you better understand your situation and make sure that your real estate exchange is well balanced.
Find Out if Your Property Qualifies for 1031 Treatment
Find out if your property qualifies for 1031 exchange treatment by speaking with a qualified intermediary today. At CPEC1031, LLC our qualified intermediaries have more than twenty years of experience facilitating 1031 exchanges of all sorts. We can help you navigate the like-kind exchange process and ensure your transaction meets all the necessary criteria for 100% tax deferral. Reach out to our team of 1031 exchange professionals today to discuss the details of your next like-kind exchange of 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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