If you want to do a partial 1031 exchange and pay a little bit of tax, you can do it. But the first thing that happens in a 1031 exchange is that your old adjusted basis gets transferred to the new property. You don’t really start to benefit from your 1031 deferral until you’ve bought replacement value over and above your transferred basis. If your old basis was $200,000 and you buy a $300,000 replacement property, you’re deferring gain on that additional $100,000 of value that you just purchased over and above your transferred basis.
That’s great, but maybe your gain was $700,000 and you bought down in value so much that you only end up deferring $100,000 in gain. The rules are kind of stacked against you. You can really fix everything by investing all of your cash into more expensive property. That’s the fundamental key to executing a 100% deferred exchange.
1031 Exchanges of All Types
1031 exchanges come in many different shapes and sizes – from forward exchanges to reverse exchanges and everything in between. The skilled intermediaries at CPEC1031, LLC have experience facilitating all types of 1031 exchanges both in Minnesota and around the country. See if you are a good candidate for a 1031 exchange by contacting our qualified intermediaries, who can guide you through the exchange process and answer any questions that arise. You can set up a meeting with our team today at our 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.
© 2024 Copyright Jeffrey R. Peterson All Rights Reserved