Year-End 1031 Exchange Tips

2018 is coming to a close and with it, so are many 1031 exchanges. This article offers some year-end tips for your 1031 exchange of real estate.

Remember Your Deadlines

It’s always important to be aware of your 1031 exchange deadlines. As a quick reminder – you have 180 days total to complete your 1031 exchange, with the first 45 of those days being set aside for replacement property identification.

Don’t Forget About the New Rules

There was a big change-up in the 1031 exchange universe in 2018. The Tax Cuts and Jobs Act preserved like-kind exchanges of real estate, but eliminated 1031 exchanges of personal property. If you were hoping to exchange your art, gold coins, business equipment, or other items of personal property, I’m afraid that’s no longer in the cards.

Consult with Your CPA

No one knows your unique tax situation better than your CPA. It’s a good idea to consult with them if you are considering a 1031 exchange. They will be able to offer you guidance as to when you should do the exchange and how an exchange can fit into your tax strategy.

1031 Exchange Accommodators

If you are considering a 1031 exchange of your real estate, a third-party administrator can help you through the process and ensure your exchange is a success. The intermediaries at CPEC1031 have more than two decades of experience assisting taxpayers with their like-kind exchanges. We bring that level of experience to each and every transaction – so you can rest assured you are in good hands with us. Contact our like-kind exchange professionals today to get your exchange started.

• 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.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

1031 Exchanges & Financial Planning

1031 exchanges can be a great tool to use as you plan for your financial future. This article is all about 1031 exchanges and financial planning. Here are a few ways 1031 exchanges can play an integral role in financial planning:

• Exchange into less management intensive property. If you currently own a management intensive property like an apartment complex, a 1031 exchange is a great way to exchange out of that property and into a different property that is less management intensive.

• Defer Your Capital Gains Tax. If you have a piece of property that you’re looking to sell, a 1031 exchange is a great way to avoid capital gains taxes on the sale of that property, while keeping your money working for you in a continued investment.

Consult with Your Financial Planner

It goes without saying that every person’s situation is different and should be treated as such. Before you make any decisions, be sure to consult with your financial planner to discuss how a 1031 exchange may fit into your financial plan.

Get Started with Your 1031 Exchange

A 1031 exchange is a great tool for deferring your capital gains taxes on the sale of real estate. But there are many potential traps for the unwary. A qualified intermediary can advise you on your exchange and make sure you don’t fall victim to any such traps during the course of your 1031 exchange. Reach out to us today to get your 1031 exchange started. Our primary office is located in the heart of downtown Minneapolis, but we work with clients across the Twin Cities, Minnesota, and the entire United States.

• Start Your Exchange: If you have questions about how a 1031 exchange might fit into your financial plan, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2018 Copyright Jeffrey R. Peterson All Rights Reserved

The 4 Most Important Rules to Follow for a Successful 1031 Exchange

There are many rules and guidelines that need to be followed to realize the tax saving benefits of a 1031 exchange. In this article, we are going to walk through the four most important rules you need to follow to ensure a successful 1031 exchange.

Like-Kind Property

All of the property involved in your 1031 exchange (your replacement property and your relinquished property) needs to be like-kind in nature. With real estate, like-kind covers most types of real estate – as long as it abides by the other rules on this list.

Qualifying Purpose

You need to have the right mindset or qualifying purpose with the property you are exchanging out of and into. Specifically, that means your property must be held for investment or business purposes. You cannot exchange property that you hold primarily for personal use, such as your primary residence.

180 Days

You have to complete your 1031 exchange within 180 days total, starting after you sell your relinquished property. You have the first 45 of those days to identify your replacement property. If you do not finish your exchange by the 180th day, your exchange will fail.

Equity, Value, Debt

Finally, you want to make sure you are exchanging into a property of equal or greater value, equity, and debt compared to your replacement property.

Minneapolis Like-Kind Exchange Company

The qualified intermediaries at CPEC1031 have decades of experience helping taxpayers throughout the Minneapolis / St. Paul metro area with their 1031 exchanges. We work one-on-one with each client to address their unique situation. Our 1031 exchange accommodators will answer all of your questions, advise you on 1031 rules and regulations, and prepare all of your documents for the closing. Contact us today to speak with a qualified intermediary who can help you get your exchange of like-kind property off the ground!

• Start Your 1031 Exchange: If you have questions about 1031 exchange rules, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2017 Copyright Jeffrey R. Peterson All Rights Reserved

Tips for Deferring Taxes with a 1031 Exchange

1031 exchanges can save you a lot of money in capital gains taxes when you sell a piece of property. Here are three tips for deferring taxes with a 1031 exchange.

Start Early

The first tip is to get your 1031 exchange set up with a qualified intermediary well before you close on the relinquished property. Sadly, we often receive calls from folks that have already closed on the sale of their relinquished property, received the proceeds, and then decided they wanted to do a like-kind exchange. The horse is out of the barn if you don't get your 1031 exchange set up in advance of the sale.

Think Like a Chess Player

The next tip is to think like a chess player - two to three moves ahead at any time. You want to be thinking about “where am I going to land for a replacement property?” Real estate is kind of like a game of musical chairs. If you don't act quickly you may find that you don't have a chair to land on when the music stops. You want to be thinking ahead and locking up a replacement property before you have to identify during the 45-day identification period. Ideally it would be nice to lock up a replacement property even before you close on the sale of your old relinquished property.

Work with Your Team of Professionals

The third tip is to work with your team of professionals. Bring your whole brain trust together. Involve your accountant, your lawyer, your real estate professional, and your financial planner in this process. This may be one of the most important financial decisions that you ever make and by using your resources you can get the best advice and information.

• Start Your 1031 Exchange: If you have questions about the best way to approach your 1031 exchange, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2017 Copyright Jeffrey R. Peterson All Rights Reserved

1031 Exchange State Law Considerations & Differences

In this 1031 FAQ video, Jeff Peterson discusses some state law considerations when conducting a 1031 exchange. Watch more 1031 educational videos here.

• Start Your 1031 Exchange: If you have questions about 1031 exchange state law considerations and differences, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2017 Jeffrey R. Peterson – All Rights Reserved