Many taxpayers considering a 1031 exchange ask themselves: “is a 1031 exchange the right move for me?” In this article, we are going to talk about a few ways in which you can answer that question for yourself and determine when a like-kind exchange is the right move for you.
Does Your Property Qualify for 1031 Exchange?
The first question you need to ask yourself is whether your property even qualifies for 1031 exchange treatment. Not all property is allowed to be exchanged under section 1031 of the Internal Revenue Code. In fact, some property (such as personal property) is excluded outright from 1031 exchange treatment. In order to qualify, your property has to be held for investment or business purposes, rather than personal use.
Do You Want to Continue Your Investment & Defer Your Taxes?
If your property qualifies for 1031 exchange treatment, the next question you should ask yourself is whether you’d rather pay capital gains taxes on the net sales proceeds, or instead defer those taxes by continuing your investment into a bigger property. If you’d prefer to defer your capital gains taxes on the sale and keep your money working for you in a continued investment, then a 1031 exchange is right for you!
Like-Kind Exchange Services
CPEC1031, LLC provides like-kind exchange services to taxpayers looking to avail themselves of the benefits of section 1031 of the IRC. A 1031 exchange can offer massive tax benefits to taxpayers selling investment real estate. In order to effectively defer your taxes, however, you need to hit certain benchmarks. A qualified intermediary can help you identify these benchmarks and explain how they impact your property and transaction. Contact the intermediaries at CPEC1031, LLC today to learn more about the exchange process.
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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