Before diving into a 1031 exchange, it’s important to make sure your relinquished property is set up for success. In this article, we are going to offer some tips for setting your property up for a successful 1031 exchange.
Make Sure Your Property is Held for Investment or Business Use
Any property involved in a 1031 exchange must be held for use in your trade or business, or for investment purposes. To set yourself up for success, it’s important to make sure your real property ticks this essential box before embarking on a 1031 exchange. If your property is currently held for personal use and you want to exchange it, you may be able to do so if you convert it into an investment property and maintain it that way for a period of time before conducting your exchange.
Vacation Homes Can Be Tricky
When it comes to vacation homes, things can get a little tricky. While it is possible to do a 1031 exchange involving a vacation home, there are more steps you need to take to prove that the property is held primarily for investment purposes, and not for your own personal use. A qualified intermediary can explain these intricacies and help set your property up for a successful 1031 exchange.
Defer Taxes with Section 1031
You may have heard about the tax-saving benefits of section 1031 of the IRC and wondered whether or not you might qualify. The good news is that any United States taxpayer can utilize section 1031 to defer capital gains taxes when selling qualifying real estate. It doesn’t matter if you’re an industry veteran or just dipping your toe into the realm of investment real estate – 1031 exchanges can be used by anyone! Contact the qualified intermediaries at CPEC1031, LLC today to learn more about the like-kind exchange process and see if your property is eligible for 1031 exchange treatment.
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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