Any given 1031 exchange must be completed within 180 days of its initiation. This can pose problems for taxpayers, especially in a hot seller’s market. In this article, we are going to offer some tips and tricks for taxpayers who can’t find a suitable replacement property during their 1031 exchange.
2 Realms of Real Property
There are two realms in which you can search for your replacement property, which has to be real estate in the United States held for investment or business purposes.
The big realm is traditional brick and mortar real estate.
The other realm is the securitized realm, in which companies have products that are marketed and regulated as securities but nevertheless also constitute real estate for federal tax purposes.
Benefits of the Securitized Realm
This securitized realm is a great place to go when you can’t find suitable replacement property in traditional real estate. The added benefit of the securitized realm is that it’s much less management intensive compared to traditional real estate.
Right now, because the market is so hot, property owners in many cities are looking down the barrel at higher taxes, greater regulation, and more potential difficulties. Because of those potential headaches, many owners are deciding to sell their property at the top of the market and exchange into a Delaware Statutory Trust, for example, that offers management-free alternatives
Minnesota Qualified Intermediaries
At CPEC1031, LLC our team of qualified intermediaries has over two decades of experience working on 1031 exchanges of all kinds. We can help you understand your options in a hot seller’s market. Reach out to us today to learn more about our 1031 exchange services and see how we can help with your next exchange!
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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