What CPAs Should Know About Qualified Opportunity Zones

CPAs are always on the lookout for new tax-saving avenues that they can share with their clients. The new kid on the block is the qualified opportunity zone. In this article, we are going to explain what CPAs should know about qualified opportunity zones.

How Qualified Opportunity Zones Work

Qualified opportunity zones are a recent tax tool that allow investors to defer capital gains taxes when selling property. The catch is that you have to reinvest your capital from the sale into a “qualified opportunity zone” as defined by the governor of the state in which you are investing the funds. The important thing to remember here is that these taxes will come due on December 31, 2026.

1031 Exchange is Often a Better Option

Compared to the new qualified opportunity zones, 1031 exchanges are often a more tax-efficient option. The biggest difference between a qualified opportunity zone and a 1031 exchange is that there is no set date at which all capital gains taxes become due.

With a 1031 exchange you can defer your gains indefinitely by continuing to exchange into bigger and better properties – thus keeping your money hard at work for you as time goes by.

Get Help with Your Real Estate Exchange

If you’re looking for help with your 1031 exchange, you’ve come to the right place! CPEC1031 offers a full range of 1031 exchange services. Our qualified intermediaries can take the reigns of your exchange and ensure that everything goes off without issue. We’ll make sure you are fully prepared for the closing table. Contact us today to set up a time to chat with one of our 1031 exchange professionals about your real estate exchange. You can find us at our offices located in downtown Minneapolis.

• 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.

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved

How CPAs can Advise Their Clients on Reverse 1031 Exchanges

Reverse exchanges offer a lot of benefits in a hot seller’s market, but many taxpayers are unaware of how to properly utilize this effective tool. In this article, we are going to offer some tips that CPAs can use to advise their clients on reverse 1031 exchanges of real estate.

Use Reverse Exchanges in a Hot Seller’s Market

When the market favors sellers (as it does at the time of this writing), a reverse exchange can be a huge asset. Reverse 1031 exchanges operate a bit differently than standard forward exchanges. In a forward exchange, here is the order of operations:

1. The taxpayer sells their relinquished property.

2. The taxpayer identifies new replacement property.

3. The taxpayer acquires their replacement property and reinvests their sales proceeds into it.

In a reverse exchange, the order of operations is reversed:

1. The taxpayer acquires their new replacement property first.

2. The taxpayer identifies their new replacement property in writing.

3. The taxpayer sells their relinquished property and reinvests the sales proceeds into the replacement property.

Minnesota 1031 Exchanges of Real Property

Looking for a qualified intermediary to facilitated your 1031 exchange? Your search stops here! At CPEC1031, we focus on like-kind exchanges under section 1031 of the IRC. With twenty years of experience under our belts, we have the knowledge and expertise needed to bring your exchange across the finish line. Contact us today at our Minneapolis office to learn more about the 1031 exchange process and get your exchange off the ground!

• 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.

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved