Let’s talk about consolidation. If you’re selling multiple relinquished properties in a 1031 exchange, can you take the proceeds from numerous sales and combine them together to buy one bigger replacement property?
The answer is yes. However, this comes with two challenges.
The logistics of trying to herd all of your cats together for those multiple sales to occur, thus allowing you to assemble your capital for the big purchase.
Accounting issues. You need to make sure that the replacement property is valued large enough that it can accommodate the proceeds from multiple sales. Generally you want the replacement property to be at least equal if not greater in value than the amounts realized from the multiple relinquished properties. Those amounts realized are the gross sale prices minus the transactional expenses such as commissions, recording fees, and other things that reduce the profit on the sale.
Remember, you can do a 1031 exchange to acquire a bigger and better property but you have to work out the logistics and accounting.
CPEC1031, LLC – Start Your Like-Kind Exchange
Start your like-kind exchange with CPEC1031, LLC today. We have more than two decades of experience working with clients throughout the United States on their 1031 exchanges. We facilitate exchanges of all types – from duplexes, to retail spaces, to large office buildings. As long as you own property held primarily for investment or business purposes you can benefit from a 1031 exchange. Contact our office today to set up a time to chat about the many benefits of section 1031 and how you can begin the process.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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