How to Determine Which Specific DSTs are Offered by Financial Institutions

Each financial institution (RBC Wealth Management, US Bank, Morgan Stanley, etc.) decides what investment products can be put onto their platform. They do their own due diligence on their properties and the sponsors. They also restrict their financial representatives to only sell those products that are approved.

A financial representative for a particular institution can introduce to their clients these approved products. You can communicate with the alternatives desk at one of these institutions to determine what DSTs are available and the details of those DSTs.

If you need help finding the right DST to use for your 1031 exchange, reach out to a qualified intermediary who can point you in the right direction.

MN Qualified Intermediaries You Can Count On

At CPEC1031, LLC you can count on our qualified intermediaries to handle all aspects of your like-kind exchange from start to finish. Our qualified intermediaries have more than two decades of experience facilitating exchanges of all types. Let us take care of all the specifics of your next 1031 exchange and make sure that you are able to defer 100% of your capital gains tax burden. You can find us at our downtown Minneapolis offices, but note that we provide 1031 exchange services throughout the United States.

• 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.

© 2024 Copyright Jeffrey R. Peterson All Rights Reserved

What Did Rental Car Companies Do After Personal Property Exchanges were Restricted in 2018

Prior to 2018, personal property exchanges were allowed under section 1031. Rental car companies were among the largest users of this tax-deferral tool. They would sell an aging fleet of vehicles and reinvest the net proceeds into newer vehicles while deferring their capital gains tax.

After personal property exchanges were restricted in 2018, initially rental car companies didn’t care much because they got immediate expensing. They were able to take an immediate tax deduction and write off their brand new vehicles. But that expensing is ratcheted to decrease over time. Eventually, these companies are not going to be able to take those tax-advantages write-offs and they’re going to wish they could continue to exchange their vehicle fleets under the old 1031 rules.

These companies who used to rely heavily on personal property exchanges were enticed by the immediate gratification of expensing, without thinking through the fleeting nature of that perk. When these companies are no longer able to expense a large portion of these vehicles, they may regret not pushing harder to keep personal property exchanges.

Find a 1031 Exchange Company Near You

Find a 1031 exchange company near you today to get started with your next like-kind exchange of investment real estate. Anyone who owns qualifying US real property can avail themselves of the many benefits of the 1031 exchange. If you’re curious about whether or not your property is a good fit for 1031 exchange treatment, contact a 1031 exchange company near you to learn more about the process, its benefits, and whether you can do an exchange with your property.

• 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.

© 2024 Copyright Jeffrey R. Peterson All Rights Reserved

1031 Exchange Protocols to Safeguard the Client’s Money

When we facilitate 1031 exchanges, we usually operate under the qualified intermediary safe harbor. Under that modality, we act as a third party administrator to facilitate 1031 exchanges. However, this is not the only safe harbor that’s allowed when conducting 1031 exchanges. Another safe harbor is known as the qualified escrow agent safe harbor.

Under that safe harbor, we have the 1031 exchange sales proceeds held by a bank acting as a fiduciary under a qualified escrow deposit agreement, wherein the bank plays the role of the qualified escrow agent. Their job is to safeguard the money and not release it without the client’s written authorization. That way the client can sleep easy at night knowing they have a reputable bank holding their money pursuant to a qualified escrow deposit agreement and they’re not allowed to release the funds without the client’s explicit authorization.

In certain circumstances, we will even introduce the client to the banker at the bank that will be holding their funds and have them create a password that’s only known to the bank and the client. Then, in order to release the funds, the bank will not only need to check for your signature authorization, but also do a callback directly to the client to confirm the password and verify the wiring instructions.

These are just a few of many protocols that we put in place to safeguard our client’s 1031 exchange funds.

1031 Exchanges for All Taxpayers

Many people don’t realize that 1031 exchanges can be utilized by any United States taxpayer who owns qualifying real estate (i.e. real estate held for investment or business purposes). A lot of the folks we work with are small, mom and pop shops who want to utilize the awesome power of section 1031 to defer their capital gains taxes and build their wealth over time. We can help you too. Contact the qualified intermediaries at CPEC1031, LLC to learn more about our services and how we can help you take your first steps on the road to tax-deferral.

• 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.

© 2024 Copyright Jeffrey R. Peterson All Rights Reserved

What Type of Property do Farmers Typically 1031 Exchange Into?

1031 exchanges are very popular among farmers who want to sell their current farmland and reinvest in larger property while deferring capital gains taxes. Many people wonder what type of property farmers typically exchange into after selling their farmland.

In general, Minnesota farmers want to buy more farmland – ideally close to their home. They don’t want to be farming land on the other side of the county. Additionally, farmers typically want to buy really productive land. There are two primary considerations farmers have when considering 1031 replacement property:

·         What is the soil like?

·         How close is it to my home farm?

Of course, not all farmers exchange into more farmland when doing a 1031 exchange. Perhaps a farmer has children who all went into different careers and have no interest in continuing the family farming operation. In this type of situation, farmers will often exchange into DSTs to ensure a more reliable income stream for the remainder of their lives. Farmers who have multiple heirs also often utilize a DST conversion into an UPREIT that makes it easy to dole out shares to numerous heirs.

Our Qualified Intermediaries are Here to Help You

The qualified intermediaries at CPEC1031, LLC are ready and waiting to help you with your exchange of investment real estate. With more than twenty years of experience at our back, we are more than prepared to handle whatever comes our way during the course of your 1031 exchange. Start realizing the tax-saving benefits of section 1031 today by contacting a qualified intermediary who can explain the process and guide your decision-making. Find us at our Minneapolis offices and schedule a time to chat 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.

© 2024 Copyright Jeffrey R. Peterson All Rights Reserved

When do You Pay Capital Gains Tax During a 1031 Exchange?

Imagine you’ve exchanged your gains into a particular replacement property using the 1031 provision, and then you decide to sell that property at a later date after it has increased in value. In this scenario, do you have to pay the gain on the current appreciation, or do you have to pay the gains that have built up over all of the previous exchanges?

In this situation, you have to pay the gains on the entire history of the exchanges. Unlike the principal residence exclusion, in a 1031 exchange you’re merely deferring the gain from property to property. This is why many taxpayers who do one like-kind exchange, choose to continue to defer their gains in subsequent exchanges throughout their lifetime. When you’re continually deferring your gain, you build more equity to redeploy into your replacement properties. In turn, that means your lender will likely qualify you for bigger and bigger investments as you build your reputation as a responsible steward of the real estate.

Find a Qualified Intermediary Near You

Find a qualified intermediary near you to get started with your 1031 exchange. Whether you’re conducting a forward, reverse, or build-to-suit exchange, CPEC1031 has the resources you need to complete your like-kind exchange of real estate. Our 1031 professionals can answer all of your questions regarding your exchange, prepare any documents required, and explain the process so there are no surprises along the way. Reach out to our team of like-kind exchange intermediaries today to get started with your next like-kind exchange and start deferring your capital gains taxes!

• 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.

© 2024 Copyright Jeffrey R. Peterson All Rights Reserved