Here's a piece of advice - never own real estate in a corporation. Now there are always exceptions to that rule, but the preferred vehicle for owning real estate is in an LLC.
Single Member LLCs
In particular, if you're a single individual owning real estate you may prefer to have what's called a single member disregarded entity (or LLC) acquire your replacement properties. For tax purposes the LLC doesn't exist, it rolls up to your social security number. But for state law liability protection purposes the LLC acts as a barrier, protecting you from personal liability associated with the property.
Potential Liabilities
What if you own real estate and someone is bitten by a dog on the real estate that you own? Perhaps you'll be sued under the theory of premises liability that you didn't protect the public from stray dogs attacking pedestrians. Or what if there are environmental contaminants found on the property? Perhaps you’d have some exposure to environmental liability. Because of the uncertainties and the predatory creditors that lurk out there, many people are advised to own real estate inside of a liability protected identity. The question is what entity is most appropriate for you? Oftentimes a limited liability company or LLC is the ideal entity.
Minnesota Qualified Intermediaries
If you're considering a 1031 exchange in Minnesota, contact the qualified intermediaries at CPEC1031, LLC. Our team has over two decades of experience in the 1031 exchange industry. We can help you through all the details of your 1031 exchange and help you defer your capital gains taxes on the sale of real estate. Contact us today at our downtown Minneapolis office to learn more about our services and get started!
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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