1031 exchanges are excellent vehicles for tax deferral. But they’re not an option in every case. In this article, we are going to talk about a few potential reasons why you might not be able to conduct a 1031 exchange.
Your Property Doesn’t Qualify
The first thing you need to know about 1031 exchanges is that not all property qualifies for 1031 exchange treatment. Personal property is not allowed to be 1031 exchanged. 1031 exchange property must be real estate that is used primarily for investment or business purposes (in other words, your primary home would not qualify). All property involved in the exchange needs to be like-kind as well. If your property doesn’t meet these requirements, you won’t be eligible for a 1031 exchange.
You’ve Already Sold Your Property & Received the Sales Proceeds
1031 exchanges require some planning and foresight. You need to work with a qualified intermediary to set up your exchange before you sell your property. Once you’ve sold your property and received the sales proceeds, you will not be able to set up a 1031 exchange on the sale retroactively.
Minnesota Qualified Intermediary Services
CPEC1031, LLC provides qualified intermediary services for 1031 exchange clients in Minnesota and across the United States. Our 1031 exchange professionals have decades of experience working on like-kind exchange transactions involving real estate. If you are searching for a qualified intermediary to lead your next exchange, you’ve come to the right place! Contact us today to learn more about the 1031 exchange process, its benefits, and how we can help you defer capital gains taxes on the sale of real estate via a like-kind 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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