We’re currently experiencing a hot seller’s real estate market, which can make it difficult for taxpayers looking to find replacement property for their 1031 exchanges. In this article, we are going to discuss when it’s advantageous to park your 1031 exchange property.
Parking Your 1031 Exchange Property
If you are having trouble locking up a replacement property for your 1031 exchange, what you need to do is a reverse 1031 exchange. In a typical reverse exchange, CPEC1031 acting as your intermediary sets up an Exchange Accommodation Titleholder (“EAT”). This is typically an LLC wholly owned by the intermediary that acquires the new property for you. The EAT purchases the replacement property and holds it so nobody else can get it. The IRS has laid out a safe-harbor in revenue procedure 2000-37. This is basically a recipe on how to do a reverse exchange. The best part of this deal (procedure) is that you can have your intermediary take down this property through the EAT. The bad side is, your intermediary can only park (own) this property and hold it in the EAT for up to 180 days under the safe-harbor. That means, you basically have six months to unload or dump your old relinquished property.
CPEC1031, LLC – 1031 Exchange Company
At CPEC1031, LLC we focus exclusively on 1031 exchanges under section 1031 of the Internal Revenue Code. We have over twenty years of experience facilitating like-kind exchanges of investment real estate. Let us put our experience to work for you on your next 1031 exchange. Start realizing the tax saving benefits offered by the 1031 exchange. Contact us today to learn more about our 1031 exchange services. You can find us at our primary 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.
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