Working with a qualified intermediary is essential to ensuring the successful completion of your like-kind exchange of real property. But why is that? In this article, we are going to explain why working with a qualified intermediary is the best way to ensure a successful 1031 exchange of real estate.
A Qualified Intermediary Insulates You From Receiving Boot
To successfully defer your capital gains tax burden via a 1031 exchange you need to reinvest all of your net proceeds from the sale of your relinquished property into a new replacement property. You cannot receive any part of your sales proceeds at any point during the process. Doing so would trigger taxable boot and devalue the benefits of your exchange. This is where an intermediary comes in handy. They can hold onto your net proceeds in a separate, segregated bank account on your behalf during the exchange process. This insulates you from receiving boot and protects your 1031 exchange.
Like-Kind Exchange Company in Minnesota
A like-kind exchange of real estate can help you save a lot of money that would otherwise be paid out in capital gains taxes. Instead of taking a capital gains tax hit, you can reinvest the net proceeds from the sale of your property into a replacement property of equal or greater equity, value, and debt. In the process, you can defer 100% of your capital gains taxes. Contact CPEC1031, LLC today to learn more about the details of section 1031 and how you can use a 1031 exchange to keep your money working for you in a continued investment.
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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