1031 Exchanging from an Apartment Building to a Retail Building

One of the most common questions we get about 1031 exchanges is on the topic of exchanging between different segments of the real estate market. For example, can you do a 1031 exchange from an apartment building to retail building? 

 Like-Kind Property

Almost all US real property is considered “Like-Kind” for 1031 exchange purposes.

FROM THE IRS:

Properties are of like-kind if they’re of the same nature or character, even if they differ in grade or quality. Improved real property is generally of like-kind to unimproved real property. For example, an apartment building would generally be of like-kind to unimproved land. However, real property in the United States is not of like-kind to real property outside the U.S.

1031 Exchanges of Investment Real Estate

At CPEC1031, we have over two decades of experience facilitating exchanges of like-kind property under section 1031 of the Internal Revenue Code. We can help you prepare all of your documentation, advise you on replacement property, and answer all of your questions. Give us a call today to set up a time to talk with a qualified intermediary about your 1031 exchange. You can find us at our main office in downtown Minneapolis, or at one of our satellite offices around the US.

• 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

Can I Do a 1031 Exchange from an Apartment Building to Retail?

Many taxpayers conducting 1031 exchanges want to know if they can exchange property between different industries or market segments. In this article, we are going to talk about whether or not it’s possible to 1031 exchange from and apartment building into a retail space.

Exchanging from Industry to Industry

The beauty of 1031 exchanges of real estate is that the like-kind rule is very broad. Most real estate is considered like-kind to most other real estate. That means it’s relatively easy to exchange out of one industry and into another (so long as you meet all of the other requirements of an exchange).

Let’s say you own a small apartment building (a four-plex) and you want to sell that property and exchange into a retail property. Can you do that under section 1031? Absolutely.

But remember, your property still needs to meet the qualifying purpose rule (it needs to be held for trade or business purposes), you need to complete the exchange within 180 days, and you need to go up in value, equity, and debt on the new property.

CPEC 1031

At CPEC1031, our business is 1031 exchanges. We have over two decades of experience facilitating exchanges for clients in Minnesota and across the United States. Our qualified intermediaries can walk you through each and every step of your exchange. Contact us today to learn more about the 1031 exchange services we offer and get your exchange up and running. Our primary office is located in downtown Minneapolis, but we work with clients all over the country.

•  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 Exchanging Apartment Buildings

Taxpayers and investors can exchange out of and into a wide variety of different property types. In this article, we are going to discuss 1031 exchanges of apartment buildings.

What Type of Property Suits You?

When considering investing in real estate, think about the type of property that’s right for you. Apartment buildings can be a great source of continuous revenue – with rent being paid monthly. However, be aware that apartment buildings can be management intensive compared to other properties. You need to deal with tenants, fix any maintenance issues that arise, and more. If you’re reaching retirement age, you may not want to have to deal with all these issues. In that case, it might be in your best interest to exchange into a less management intensive property.

Exchanging Up

Whatever property you choose, you should always consider a 1031 exchange to defer your capital gains taxes. Like-kind exchanges allow you to exchange up into a bigger and better property. That could mean exchanging from a duplex to a fourplex, or from an apartment complex into a restaurant. In any case, you can avoid a hefty capital gains tax bill by exchanging your property in a 1031 transaction.

Defer Taxes with Section 1031

Don’t get stuck with a huge tax bill when you sell your next piece of real property. Instead, defer your capital gains taxes with a 1031 exchange! With more than two decades of experience, CPEC1031 has the skills necessary to lead your exchange across the finish line. Our intermediaries are available to answer your questions and help you get started with your exchange today. Contact us at our downtown Minneapolis office to start the conversation.

• 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