4 Benefits of a 1031 Exchange Beyond Tax Deferral

1031 exchanges are a fantastic way to defer your capital gains taxes when selling qualifying real estate. But there are many more benefits to 1031 exchanges that go beyond tax deferral. In this article, we are going to discuss six benefits of a 1031 exchange that go beyond deferring capital gains taxes.

1. Increased Potential Income. Taxpayers conducting 1031 exchanges can sell their appreciated real estate and exchange into income-producing property with potentially greater cash-flow and appreciation.

2. Market Maneuverability. A 1031 exchange is a great vehicle for changing property types, allowing taxpayers to exchange out of and into different sectors of the real estate market. For example, a taxpayer could 1031 exchange out of an apartment building and into a retail property.

3. Relocation. 1031 exchanges are allowed between states, so you can use them to exchange out of your current state and into a different state with lower tax rates, for example.

4. Consolidation. If you own multiple properties and you want to simplify your situation, a 1031 exchange can help you exchange out of those multiple properties and into a single property.

CPEC1031, LLC – 1031 Exchange Company

At CPEC1031, LLC we have been facilitating 1031 exchanges of all types for over twenty years. Our team of qualified intermediaries can help guide you through all the details of your next 1031 exchange. Contact us today to learn more about the 1031 exchange process and see how we might be able to assist you in deferring your capital gains taxes. 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

What are the Benefits of 1031 Exchanges other than Tax Deferral?

When it comes to 1031 exchanges of real estate, most people are aware of the tax deferral benefits offered by section 1031. But there are a number of other potential benefits of doing a 1031 exchange that many people are unaware of. In this article, we are going to take a look at some of the benefits of 1031 exchange apart from tax deferral.

Greater Income Potential

Exchangors can sell any appreciated real property and acquire income-producing property with better cash flow and potential appreciation.

Change Property Types

With a 1031 exchange, taxpayers can exchange into different types of investment real estate. For example, taxpayers can exchange from residential to commercial property.

Relocate

Exchange your current property and relocate to a state with greater potential growth or lower tax rates.

Consolidate

Taxpayers who own multiple properties can consolidate by exchanging them into a single property.

Get out of Management Intensive Property

1031 exchanges allow you to exchange out of property that requires a lot of deferred maintenance and into new property that is less management intensive.

Lever Up

Lever up with a 1031 exchange by selling smaller property and stretching your equity out into larger property with greater potential appreciation.

CPEC1031

At CPEC1031, LLC, we are here to help you with your 1031 exchanges of real estate. We have been facilitating exchanges for taxpayers across the United States for over twenty years. Contact us today to discuss the details of your next 1031 exchange of real estate and start realizing the tax-saving benefits of section 1031. You can find us at our primary offices 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.

The Difference Between Tax Free & Tax Deferred

Many people think that a 1031 exchange is “tax free.” This is not true. What a 1031 exchange offers is tax deferral. But what exactly does that mean? In this article, we are going to talk about the difference between tax free and tax deferred when it comes to a 1031 exchange.

Is a 1031 Exchange Tax Free?

To the question at hand – is a 1031 exchange completely tax free? No. 1031 exchanges are not tax free in the sense that you never have to pay taxes on the capital gains from your sale. Instead, 1031 exchanges allow you to defer your capital gains taxes on the sale of real property. There is an important distinction we need to make here between the terms “tax free” and “tax deferred.” Tax free implies that you never have to pay taxes. That does not describe a 1031 exchange. Tax deferral implies that you are still responsible for the taxes in question, but aren’t responsible for paying them until some point in the future.

Deferring Taxes Indefinitely

Although a 1031 exchange is not tax free, with a good strategy and enough foresight, you can potentially defer your taxes indefinitely by continually exchanging into new replacement property over time.

MN 1031 Exchange

Contact a 1031 exchange qualified intermediary today to learn how to defer your capital gains taxes on the sale of real estate. At CPEC1031, our qualified intermediaries have decades of experience facilitating exchanges of all shapes and sizes. Contact our team of qualified intermediaries today to set up an appointment over the phone or in person at our downtown Minneapolis office.

• Start Your Exchange: If you have questions about 1031 exchange tax deferral, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2017 Copyright Jeffrey R. Peterson All Rights Reserved

Does a 1031 Exchange Eliminate Capital Gains Taxes?

But many people incorrectly believe that a 1031 exchange completely eliminates capital gains taxes on the sale of property. In this article, we are going to explain why that’s not the case, and what benefits a 1031 exchange can actually bring to a real estate transaction.

Tax Elimination vs. Tax Deferral

So do 1031 exchanges completely eliminate capital gains taxes when you sell a piece of property? The short answer is no – a 1031 exchange does not completely eliminate capital gains taxes from the sale of real or personal property. What a 1031 exchange does is defer those capital gains taxes.

When you sell a piece of real estate, typically you are responsible for paying capital gains taxes on the sales proceeds. A 1031 exchange allows you to avoid that potentially large capital gains tax bill by moving your net proceeds into a like-kind investment property.

While a 1031 exchange does not completely eliminate your capital gains taxes, you can effectively keep them at bay by continuing to exchange out of and into like-kind property. Ideally, you can continue deferring your taxes (and allowing your money to compound and build wealth over time) until you die.

Start Your 1031 Exchange

A like-kind exchange can present a lot of challenges and complications if you don’t know what you’re doing. Having a qualified intermediary on your team can be the difference between a successful and a failed exchange. At CPEC1031, our team of qualified intermediaries has been helping taxpayers with their like-kind exchanges for decades. We have the experience and the knowledge to help you through your exchange. Start your 1031 exchange today by reaching out to one of our qualified intermediaries.

• Start Your 1031 Exchange: If you have questions about tax deferral through section 1031, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2017 Copyright Jeffrey R. Peterson All Rights Reserved