How to Finance a Reverse 1031 Exchange of Real Estate

Many people who are considering a reverse 1031 exchange want to know how to get the money to finance their exchange. There are two ways to finance a reverse 1031 exchange.

Out of Pocket vs. Lender Financing

The first option for financing your reverse exchange is to advance the funds out of pocket. The other option is for you to arrange for financing with your lender.

Pros & Cons

If you use bank financing, the exchange company signs the note and mortgage on a non-recourse basis, and you guarantee the debt or cosign the loan. This applies if you are parking the ownership of the replacement property. However if you are parking the ownership of the relinquished property, then the financing with the bank is less complicated.

Contact CPEC1031, LLC Today!

CPEC1031, LLC has been facilitating 1031 exchanges of qualifying real property for more than two decades. Our qualified intermediaries are here to help. We have the knowledge and expertise to help you through your 1031 exchange and defer your capital gains taxes. Contact us today at our Minneapolis office to learn more about our full range of services and see how we can help you through the details of 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

How to Pick an Ownership Structure for Your Real Estate Investment

When it comes to investing in real estate, you have several options for how to structure the ownership of the property. In this article, we are going to offer some tips for choosing the right ownership structure for your next real estate investment property.

Real Estate Ownership Structures

Here are the most common examples of real state ownership structures:

• Partnership

• LLC

• S-Corp

• Grantor Trust

• Tenancy-in-Common (TIC)

Use Tenancy-in-Common for 1031 Exchanges

When it comes to 1031 exchanges of the property in question, a little foresight goes a long way. While all of the above listed ownership structures can do a 1031 exchange, there are some restrictions. If you want to do a 1031 exchange on property owned in a partnership, LLC, S-corp, or grantor trust, all investors need to re-invest into the replacement property together. This works just fine if all owners are in agreement about how to handle the sale. If you anticipate using a 1031 exchange when you sell your property, then the best ownership structure is the TIC (Tenancy-in-Common) option.

MN Qualified Intermediaries Conducting 1031 Exchanges

If you are selling real estate and want to avoid a big tax bill, consider a 1031 exchange, which allows you to defer your capital gains taxes. CPEC1031 is a Minnesota-based group of qualified intermediaries who specialize in 1031 exchanges of real property. Our skilled qualified intermediaries have more than twenty years of experience facilitating exchanges for investors all over the United States. Contact us today at our downtown Minneapolis office to learn more about how a 1031 exchange can benefit you.

• 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

1031 Exchanges Benefit Real Estate Investors Big and Small

Many people assume that 1031 exchanges can only be used by big fancy real estate investors. But the fact is that any United States taxpayer can utilize section 1031 of the Internal Revenue Code to save taxes when selling real property. In this article, we are going to talk about how 1031 exchanges can be utilized by everyone to defer capital gains taxes on the sale of real estate.

Tax Deferral for All

When you sell a piece of real property, you are liable for the capital gains taxes on the sale. Depending on the property, these taxes can add up quickly and be a huge hindrance for the taxpayer conducting the sale. Sometimes the capital gains tax bill gets so large that it deters the taxpayer from selling the property entirely. That’s not good for the taxpayer and it’s not good for the economy as a whole.

This is exactly why the 1031 exchange was created – to incentivize property owners to continue investing and to spur economic growth. And it’s not just for big wig investors. Even taxpayers that own relatively small properties can utilize the 1031 exchange – so long as they meet the necessary requirements.

1031 Exchanges in Minneapolis, MN

If you are considering a 1031 exchange on a property in Minnesota, contact the qualified intermediaries at CPEC1031, LLC today. Our 1031 exchange specialists have over two decades of experience facilitating exchanges of real property in Minnesota and across the country. We can help you through every level of your exchange – from the sale of your relinquished property, to the acquisition of your replacement property. Don’t hesitate to contact us today at our downtown Minneapolis office to set up a time to meet with our team.

• 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

The Many Benefits of 1031 Real Estate Exchanges

There are many reasons why you might benefit from doing a like-kind exchange, rather than selling your real property. In this article, we are going to discuss the benefits of doing a 1031 exchange of real estate.

Defer Your Capital Gains Tax

The largest immediate benefit to the taxpayer is that a 1031 exchange allows you to defer your capital gains on the sale of real estate. Typically, when you sell real estate, you are hit with a capital gains tax liability. A 1031 exchange encourages people to reinvest their proceeds by allowing them to defer those capital gains taxes as long as they move their net proceeds into a new replacement property.

Put Your Money to Work

A 1031 exchange also allows you to put your money to work, so to speak. Rather than writing a check to the government for those capital gains taxes, you can re-invest in a bigger, better property and keep that money compounding and building wealth over time.

Diversify Your Portfolio

Finally, a 1031 exchange is a great way of diversifying your real estate portfolio. With a like-kind real estate exchange, you can exchange out of and into different business segments as needed.

Qualified Intermediary Company in Minnesota

1031 exchanges can save you a lot of money in capital gains taxes when you sell real estate. At CPEC1031, LLC, we provide qualified intermediary services to clients in Minnesota and throughout the United States. Our qualified intermediaries have twenty years of experience facilitating like-kind exchanges, and have the skills necessary to ensure your exchange is successful. We can answer all of your questions, prepare your 1031 documents for closing, and advise you throughout the process. Contact us today to see if your property qualifies for a 1031 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved

I’m not a Big Real Estate Investor, Can I Still do a 1031 Exchange?

A lot of clients come to us wanting to do a 1031 exchange of real estate, but think they can’t because they are not big-time investors. In this article, we are going to talk about why 1031 exchanges are not only for big time investors.

Who can Do a 1031 Exchange?

Any United States taxpayer can avail themselves of the tax-deferral benefits of a 1031 exchange of real estate. You do not need to be a big shot investor to conduct a 1031 exchange and defer your capital gains taxes. All you need is to have a like-kind property that you hold for a qualifying purpose (for investment or business purposes). When you go to sell that property, instead of cashing out, you need to reinvest your sales proceeds into a bigger, better replacement property. The end result is that your money continues to work for you in a new investment property, and you get to avoid a big tax bill.

1031 exchanges can be conducted across state lines and between different segments of the real estate market. So even if you’re not a hot shot investor, you can still use section 1031 to your advantage the next time you are considering selling real property.

A 1031 Exchange can Help You

With a 1031 exchange of real estate, you can defer your capital gains taxes that would otherwise go to the government and keep that money working for you in a continued investment. A qualified intermediary can walk you through this process step by step and make sure you are hitting all required benchmarks along the way. Give us a call today to learn more about our services and how we can help you save money on your next real estate sale. Our office is located in downtown Minneapolis but we work with taxpayers throughout 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved