In the Midwest, we do a lot of family related party 1031 transactions. That’s because we have a lot of farmers in the region. If you’re a farmer and you want to buy a productive farm right next to your home farm, oftentimes you’ll be buying that property from a family member. These farmers have synergistic economic reasons for buying property as well as emotional connections to the land itself.
Accountants in rural Minnesota are accustomed to filing form 8824 that specifically asks you to disclose if you bought or sold directly or indirectly from a related party. If you do a related party transaction, you’re required to provide a narrative explanation of why this transaction is legitimate and not part of a scheme to avoid the imposition of tax. It’s important to work with your 1031 intermediary to craft this narrative statement to ensure your exchange doesn’t run afoul of IRS guidelines.
Contact a 1031 Intermediary
Contact a 1031 intermediary at CPEC1031, LLC today for help with your next 1031 exchange. Our team is standing at the ready to walk you through all the details of the 1031 exchange process, from the sale of your relinquished property to the acquisition of your replacement property. We’ll make sure you set yourself up to defer as much of your capital gains tax burden as possible. Set up a time to chat with one of our Minnesota qualified intermediaries today.
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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