1031 exchanges allow you to defer your capital gains tax burden on the sale of real estate. What many people don’t realize is that you can do 1031 exchanges of raw land, in addition to constructed properties. In this article, we are going to explain some of the benefits of 1031 exchanging raw land.
Raw Land Exchanges
1031 exchanges are governed by section 1031 of the Internal Revenue Code. They allow taxpayers to defer their capital gains taxes when selling real estate, as long as certain guidelines are met. All property involved in a 1031 exchange must be held for investment or business use – rather than personal use. It’s also important to note that you only have 180 days to complete your exchange once you start the process. If you satisfy all the requirements of a 1031 exchange you can defer your capital gains taxes on the sale. Over the long-run, your investment property will compound. If you wish to sell that replacement property at any point in the future, you can consider doing another 1031 exchange to keep the investment ball rolling!
You can also utilize raw land in a construction exchange (aka a build-to-suit exchange) in which you construct improvements to the property and include those in the exchange.
CPEC1031, LLC
CPEC1031, LLC is dedicated to helping taxpayers save money in capital gains taxes when selling investment real estate. Our 1031 exchange intermediaries have two decades of experience helping taxpayers with their 1031 exchanges. Let us put our experience to work for you on your next exchange of real property. We can walk you through the entire process and make sure you are informed and comfortable all along the way. 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.
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