1031 exchanges can be performed on virtually any type of real estate, in any business sector or industry. In this article, we are going to talk about how you can use a 1031 exchange to move from an office property to a multi-family property.
How a 1031 Exchange Operates
A 1031 exchange operates differently than a traditional real estate sale. Rather than selling a property, receiving the net proceeds, and paying capital gains taxes on those proceeds, a 1031 exchange allows you to reinvest those proceeds into a new property and defer the capital gains taxes.
Exchanging from One Industry to Another
The beauty of a 1031 exchange is that you can use it to move from one industry to another. As long as your property is like-kind (most real estate is) and is held for qualifying investment purposes, you can sell a piece of property in one business sector and exchange into a property in a completely different industry. So you can sell an office building and exchange into a multi-family property with a 1031 exchange.
1031 Exchanges – Deferring Capital Gains Taxes on Real Estate
CPEC1031 focuses solely on helping taxpayers defer their capital gains taxes on the sale of investment real estate through the use of the 1031 exchange. Section 1031 is a provision under the Internal Revenue Code that allows any United States taxpayer to defer their capital gains tax on the sale of qualifying property by reinvesting their proceeds into a new replacement property. Contact our qualified intermediaries today to learn more about the 1031 exchange process and to start saving money in capital gains taxes.
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.
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