3 Reasons to Do a 1031 Exchange of Investment Real Estate

1031 exchanges of investment real estate offer many benefits to taxpayers looking to sell real property. In this article, we are going to discuss a few of those benefits and talk about three reasons to do a 1031 exchange of investment real estate.

Defer Your Capital Gains Taxes

First and foremost, a 1031 exchange allows you to defer your capital gains tax burden when selling investment real estate. In a standard real estate sale, you need to pay capital gains taxes on the sales proceeds. This can be a hefty tax burden. A 1031 exchange allows you to defer that tax burden and avoid a potentially huge tax bill. In order to defer your capital gains taxes in a 1031 exchange, you need to reinvest your net proceeds from the sale into a new replacement property.

Diversify your Portfolio

A 1031 exchange also offers a great method for diversifying your real estate investment portfolio. With a 1031 exchange, you can diversify into different asset classes, alternative market segments, and geographical areas.

Sell Your Vacation Home

A vacation home can be exchanged in a 1031 transaction. However, there are additional restrictions on 1031 exchanges of vacation homes that you should be aware of before starting the process.

Contact a 1031 Exchange Professional

If you are interested in learning more about the tax-saving benefits of a 1031 exchange, contact a qualified intermediary today. At CPEC1031, LLC we make the 1031 exchange process as painless as possible. Our team of professionals can guide you through the process, prepare your necessary documents, and answer any questions you have along the way. Reach out to us today to learn more about our services and how we can help with your next like-kind exchange.

• 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved

Why It May Not Be a Good Idea to Sell Investment Property that’s Increased in Value

When you’re sitting on an investment property that has skyrocketed in value, selling may be at the top of your mind. But this might not be your best course of action. In this article, we are going to explain why it’s not always a prudent idea to sell an investment property – even when it’s increased in value.

Consider Your Capital Gains Tax Burden

If you’ve owned an investment property for a number of years and it has significantly increased in value it can be quite tempting to sell the property and pocket the net proceeds. This is especially true to seniors who are entering retirement and want to have some additional liquidity. However, what many don’t think about until it’s too late is the tax burden inherent in selling an investment property. The more your property has increased in value, the more capital gains taxes you’re going to have to pay when you sell it.

Consider a 1031 Exchange

A tax-advantageous alternative to selling your property is to exchange it using section 1031 of the Internal Revenue Code. Such an exchange allows you to defer your capital gains tax burden when selling investment property, so long as you reinvest your sales proceeds into a replacement property. This keeps your money working for you in an investment and allows you to avoid a hefty tax burden.

1031 Exchange Intermediaries

If you are struggling with your 1031 exchange, you’ve come to the right place. With two decades of experience in the 1031 exchange industry, CPEC1031 has the skills and expertise needed to ensure your exchange is a success. Whether you’re looking at a forward exchange, a reverse exchange, or a build-to-suit construction exchange, we are here to help. Contact us today at our office in downtown Minneapolis to learn more about our capabilities and to set up a time to chat with one of our skilled 1031 intermediaries.

• 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

1031 Exchange: Can I Sell Investment Real Estate & Buy Precious Metals?

This is perhaps the most common question we get regarding 1031 exchanges. With the passage of the Tax Cuts & Jobs Act, only real property can now be exchanged for other like-kind real property.

Here is the specific text from section 1031 itself:

In general, No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like kind which is to be held either for productive use in a trade or business or for investment.

CPEC1031 in Minneapolis, MN

At CPEC1031, we have been providing like-kind exchange services to clients throughout the Twin Cities and greater Minnesota for decades. Our qualified intermediaries can help you throughout the entirety of your 1031 exchange. We can advise you on replacement property, prepare your 1031 exchange documents, and answer all of your questions along the way. Contact us today to learn more about the services we offer and how we can help you defer taxes on your next real estate transaction.

• 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