Can You Combine Two Properties into One Larger Property in a 1031 Exchange?

There are many questions surrounding property in a 1031 exchange or real estate. In this article, we are going to discuss whether or not you can combine two properties into one larger property in a 1031 exchange.

Combining Properties in a 1031 Exchange

The short answer is, yes – you can combine two properties into one larger property in a legitimate 1031 exchange. The real question is whether or not the one replacement property is big enough to match the two relinquished properties.

Remember, in a 1031 exchange, your replacement property has to be equal to or greater than your relinquished property in value, equity, and debt. So if that replacement property is large enough, you can certainly exchange the two relinquished properties into it.

Qualified Intermediaries in Minnesota

At CPEC1031, our Minnesota qualified intermediaries have extensive experience facilitating 1031 exchanges across the United States. Our team can walk you through the entire 1031 process and help prepare all your documents in advance of closing. If you have any questions about the 1031 exchange process or how it may be beneficial to your situation, don’t’ hesitate to reach out to our like-kind exchange professionals today. You can find us at our primary 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved

The 3 Ts of Property Ownership

Any commercial property owner will tell you that owning property is a lot of work. In this article, we are going to dive into the 3 Ts of property ownership and discuss why 1031 exchanging into less management intensive properties makes sense.

The 3 Tenets of Property Ownership

1. Tenants – Hard to deal with, unreasonable, unrealistic and unreliable (don’t pay on time, cause problems, demanding, etc.)

2. Trash – Costs of ownership with taxes, sanitation, insurance go up every year

3. Toilets – plumbing and deferred maintenance in old buildings is costly, ongoing and aggravating

Consider DST Management Free Investments

If these 3 Ts are causing you undue stress, consider the management free nature of a DST investment. What are the advantages of DST management free investments? Here are a few benefits:

• Minimal Investment Requirement

• Larger Growth Potential

• Diversification

• Management Free Ownership

• A Clearly Defined Exit Strategy

If you have any questions about the benefits of DST ownership or 1031 exchanges in general, don’t hesitate to reach out to CPEC1031! Our qualified intermediaries have decades of experience facilitating like-kind exchanges of all shapes and sizes. You can find us at our primary office located in downtown Minneapolis, or at one of our satellite offices across the United States.

• 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.

© 2021 Copyright Jeffrey R. Peterson All Rights Reserved

What Types of Property are Barred from 1031 Exchange Treatment?

Not all property can be exchanged in a 1031 transaction, and it’s important to know the distinction between acceptable property and excluded property. The recent Tax Cuts & Jobs Act brought additional changes to section 1031 and what property is allowed. In this article, we are going to talk about the property that cannot be exchanged in a 1031 transaction.

Personal Property is Excluded

The Tax Cuts & Jobs Act, which went into effect a couple of years ago, preserved 1031 exchanges of real estate, but got rid of 1031 exchanges of personal property. That means you cannot do a 1031 exchange involving any items of personal property. The following is a list of some personal property items that can no longer be exchanged in a 1031 transaction:

• Aircraft

• Artwork

• Gold Coins

• Livestock

• Business Equipment

Other Property Benchmarks

There are also other benchmarks you have to satisfy with your 1031 exchange property. The property involved in the exchange needs to be held for use in your trade or business, or for investment purposes. Property that you hold for personal use (such as your primary residence) will not qualify for 1031 treatment.

1031 Exchange Help

If you are searching for help with your 1031 exchange, you’ve come to the right place! The qualified intermediaries at CPEC1031, LLC can help you through every stage of your exchange – from the sale of your relinquished property to the closing of your replacement property. With more than two decades of experience under our belt, we have the skills needed to help you. Contact us today to learn more about the like-kind exchange process and get your exchange up and running! Our primary office is located in downtown Minneapolis, but we work with clients throughout Minnesota and 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved

Empty Office Space Threatens a New Economic Crisis - 1031 Exchanges can Help

The COVID-19 pandemic is taking a toll on the commercial real estate industry, and its impact could have broader implications for the economy as a whole. In this article, we’ll take a look at the challenges facing the commercial real estate industry during the pandemic and some potential solutions.

The Impact of COVID-19

COVID-19 has impacted every industry in one way or another, and commercial real estate is no different. With various lock-down measures in effect across the country, more people are staying home – not going out to eat, drink, or shop nearly as much as before. Furthermore, many companies have instituted work from home policies for their employees for the foreseeable future. It’s not a stretch to imagine these companies rethinking their need for physical office space as we get deeper into this pandemic.

So what happens if companies choose not to renew their office leases and we end up with a significant number of empty buildings with no plan to replace their previous tenants? No one can say for sure what the outcome would be, but it likely wouldn’t be good.

1031 Exchanges can Help

Segments of real estate industry are much weaker and more vulnerable than people think. Removing 1031 exchanges (as Joe Biden has proposed in his tax plan) will further harm an industry that is essential for job creation, economic stability and growth. In a time of great uncertainty in the commercial real estate industry, it’s important that 1031 exchanges remain intact to help prevent the further downtown of the commercial real estate market and the economy as a whole.

1031 Exchange Company in Minneapolis, MN

CPEC1031, LLC has been facilitating 1031 exchanges of real estate for over twenty years. Our qualified intermediaries have the knowledge and experience to guide you through your real estate exchange. Contact us today to learn more about the 1031 exchange process and how we can help. You can find us at our primary office 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved

Can You Change Your Identified Property Late in the 1031 Exchange Process?

We get a lot of questions from clients about their 1031 exchanges. Recently, we had a client ask if they could make changes to their identified replacement property after their identification period had ended. That’s the topic we’ll be diving into in this article.

Identification Period

As we’ve discussed before, you have two important timelines to remember in a 1031 exchange. The first is the overall 180 day time period for your exchange. You must complete your exchange no later than 180 days after it begins. The second essential time period is the 45 day identification period. This is the first 45 days of your total 180 day exchange period. Within these 45 days you need to identify in writing the replacement property or properties that you intend to exchange into. That sounds pretty simple, but what if you want to make an amendment to your identification after day 45? Can you do that?

Unfortunately, no. The 45 day identification period is very strict. You are not allowed to make any changes to your replacement property identification after day 45 of your identification period. For that reason, it’s important to make sure you have all of your bases covered in advance of your deadlines.

Qualified Intermediaries in the Twin Cities

Consider a 1031 exchange if you want to defer capital gains taxes on the sale of your real estate. At CPEC1031, LLC, our intermediaries have two decades of experience working on 1031 exchanges with clients in Minnesota and around the country. We can help you with all the aspects of your 1031 exchange – advising you and preparing all the necessary documents along the way. Realize the tax-saving benefits of a 1031 exchange today by setting up a time to chat with one of our intermediaries at our downtown Minneapolis office.

• 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved