How to Approach a 1031 Exchange of Real Estate

Many taxpayers are curious about the tax-saving benefits of a 1031 exchange, but don’t know how to get the ball rolling. In this article, we are going to discuss how you should approach a 1031 exchange of investment real estate.

Consider Your Property

The first thing you need to do is consider your property and whether it even qualifies for 1031 exchange. Only real property held for use in your trade or business, or investment purposes may be used in a 1031 exchange. That goes for both the relinquished property that you’re selling and the replacement property you’re exchanging into. If your property falls outside these definitions, it can’t be used in a 1031 exchange.

Line Up Your Replacement Property

The next step is to do your best to line up your replacement property before selling your relinquished property. Once you sell your relinquished property, your 1031 exchange clock starts ticking and you only have 180 days to identify and exchange into your replacement property. Having your replacement property lined up and ready to go before you even start makes things much easier.

Discover the Tax-Saving Benefits of Section 1031

Discover the tax-saving benefits of Section 1031 of the Internal Revenue Code by contacting CPEC1031, LLC. We have over twenty years of experience providing qualified intermediary services to clients throughout the state of Minnesota and across the country. Our team has everything you need to complete your 1031 exchange and fully defer your capital gains taxes on the sale of investment real estate. Whether you are a first-time investor, or a seasoned pro, we are here to help! Contact CPEC1031, LLC today for help with your next 1031 exchange.

  • 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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