How to Get Out of an Inherited 1031 Investment Property

If you’ve inherited an investment property you’re probably wondering what to do with it. Should you keep it? Should you sell it? What are your options? In this article, we are going to talk about your various options when it comes to inherited investment property.

Inherited Property 1031 Exchanges

One of the greatest benefits of a 1031 exchange is that you can defer your capital gains taxes indefinitely by continuing to exchange into newer replacement properties. Many taxpayers do this and then pass along their 1031 investment property to their heirs.

If you decide you do not want to maintain the inherited 1031 property, you can certainly sell it. However, that may not be the most tax-advantageous option at your disposal.

Consider the Most Tax Advantageous Option

Before you jump ship on your inherited 1031 exchange property, take a step back and consider your options. It’s possible that maintaining the property and doing a subsequent 1031 exchange is the most tax-advantageous option available. If you decide to sell the property in an outright sale, you will be subject to capital gains tax on the sale. If you do a 1031 exchange, you can defer these taxes and keep your money working for you.

Real Estate Exchanges Under Section 1031

1031 real estate exchanges can be very tax-advantageous, as they allow you to defer your capital gains tax on the sale of a piece of real estate. Instead of writing a check to the government, you can move the net proceeds from your sale into a replacement property – thus keeping your money working for you in a continued investment. For more information about the 1031 exchange process and how it can benefit you, contact the qualified intermediaries at CPEC1031 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.

© 2019 Copyright Jeffrey R. Peterson All Rights Reserved

Inherited Investment Property & 1031 Exchanges

Many taxpayers who inherit investment property want to know what their options are, and more importantly, the best way to proceed in their particular situation. In this article, we’re going to talk about inheriting 1031 exchange investment property and the options available to you.

Inherited Property

Let’s say you inherited a property that had been 1031 exchanged into by the previous owner. You have a few general options: hold on to the investment property, or sell it.

However, before you get trigger happy and sell your inherited property, it’s important to consider whether that’s the best option for you in the long-term. There is a reason why the previous owner did a 1031 exchange on the property before handing it down to you (and any other heirs). That reason is tax deferral. 1031 exchanges allow you to defer your capital gains taxes on the sale of real estate as long as you move the net proceeds into a replacement property. Over time, you can continue exchanging into bigger and better property, while avoiding capital gains taxes. Indeed, this is a much more tax-advantageous plan than selling the property outright.

Twin Cities 1031 Exchanges

At CPEC1031, we have twenty years of experience facilitating 1031 exchanges for clients in many industries. Our intermediaries work directly with our clients to make sure the exchange process goes as smoothly as possible. We can advise you on your replacement properties, prepare all of your 1031 documents, and more. Reach out to our 1031 exchange professionals today to set up your exchange. Our office is located in downtown Minneapolis but we work with clients all throughout the state, as well as across 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