Can You 1031 Exchange Stocks & Use the Proceeds to Purchase Real Estate?

This is a common question when it comes to 1031 exchanges. The short answer is no, you cannot 1031 exchange stocks and use the proceeds to purchase real estate.

1031 Exchanges are for Real Estate Alone

1031 exchanges are only for real estate. You cannot do a 1031 exchange with stocks. You could, however, use the qualified opportunity zone legislation to reinvest those stock gains in a opportunity zone fund. Deferral is only until 12-31-2026, but up to 15% of those gains may be forgiven if you hold the investment for seven years (10% for the first 5 + 5 % for the next 2) before 12-31-2026. With that in mind, you ideally need to invest quickly and then the gain on the appreciation on the investment within the opportunity zone fund is excluded if you hold for at least a total of 10 years and sell before 2047.

CPEC1031, LLC

At CPEC1031, LLC we provide 1031 exchange services to clients all across the country. Contact us today to see how we can help with your next 1031 exchange of real estate.

• 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.

© 2023 Copyright Jeffrey R. Peterson All Rights Reserved

1031 Exchanges of Vacation Homes – Good Idea or Bad Idea?

Many taxpayers want to know whether or not they can use a vacation home in a 1031 exchange of real estate. In this article, we are going to discuss some of the details surrounding using a vacation home in a section 1031 exchange.

Vacation Home Exchanges

Using vacation homes in 1031 exchanges is a tricky situation. Remember, in any 1031 exchange your property needs to be held for investment or business purposes. Property held primarily for personal use is not allowed in a 1031 exchange. Ultimately, when considering whether a property qualifies for 1031 treatment the IRS is concerned with how the taxpayer used the vacation home.

That does not mean that it’s impossible to exchange out of a vacation home. There is a safe harbor for vacation home exchanges that allows you to conduct an exchange as long as you meet certain benchmarks. Specifically, in the two years prior to exchanging the property, you need to have used the vacation home for 14 days or fewer, (or less than 10% of the time it was rented). Stay within these boundaries and you should be fine to do a 1031 exchange of your vacation home.

1031 Exchange Intermediaries in Minnesota

Our qualified intermediaries have been working with clients throughout Minnesota and across the country for twenty years. Working with a qualified intermediary is the safest way to ensure your 1031 exchange completes successfully. Your intermediary can answer any of your questions, guide you through the 1031 process, and advise you every step of the way. Contact us today at our downtown Minneapolis office to learn more about the like-kind exchange process and talk about your 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.

© 2023 Copyright Jeffrey R. Peterson All Rights Reserved

Capital Gains Tax on Commercial Property – When You Owe & When You’re Exempt

If you’ve ever sold a piece of real property, you’re likely familiar with capital gains taxes. In this article, we are going to talk about capital gains taxes – when you owe them and when you’re exempt from them.

Capital Gains Taxes on Real Estate

Capital gains taxes are taxes imposed on the sale of certain assets – such as real estate. When you sell real estate in a standard transaction, you will owe capital gains taxes on that sale.

Defer Taxes with a 1031 Exchange

If you want to avoid a big capital gains tax bill when selling real estate – a 1031 exchange is your ticket! Like-kind exchanges allow you to defer your capital gains taxes on the sale of real property. In order to defer your taxes, you need to redeploy your sales proceeds into a new (bigger) replacement property, and meet various other requirements set out by the IRS. When done correctly, a 1031 exchange can help you avoid a huge tax hit. The biggest benefit is that you can keep your money working for you in a continued investment – building wealth over time.

Exchange Your Like-Kind Property

Like-kind exchanges can get complicated quickly. That’s why it’s important to work with a skilled intermediary on your exchange. The qualified intermediaries at CPEC1031 can help you through every stage of your exchange. We can advise you on replacement property, prepare your closing documents, and answer all of your questions. Give us a call today to set up a time to chat about your exchange. Our main office is in downtown Minneapolis, but we work with clients throughout the United States.

• 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.

© 2023 Copyright Jeffrey R. Peterson All Rights Reserved

Examining the 1031 Exchange from the Inside Out

Successfully navigating a 1031 exchange often requires the help of a qualified intermediary who understands the process inside and out. Take it from someone who has been on the inside of countless exchanges – they can get complicated quickly. Your best defense against a failed 1031 exchange is a good offense. And there’s no better offensive coordinator than a qualified intermediary. In this article, we are going to offer a look at the 1031 exchange from the inside out.

Prepare Yourself

When we see 1031 exchanges fail, most of the time it’s a direct result of unpreparedness. Many of the common pitfalls of 1031 exchanges can be easily avoided with enough foresight. That’s why the number one rule of 1031 exchanges is to prepare accordingly. Consult with a qualified intermediary early in the process to make sure your exchange is a success.

Work with a Professional

1031 exchanges are complex and unwary taxpayers can fall into potential traps that can derail their exchanges. Having a qualified intermediary by your side throughout the process is an excellent way to insulate yourself from the dangers of a 1031 exchange.

CPEC1031, LLC

If you are interested in exchanging your property under section 1031 of the Internal Revenue Code, contact CPEC1031 today. Our qualified intermediaries have been facilitating exchanges of real estate for more than twenty years. We have the knowledge and skills needed to handle your exchange. We can handle all the technical aspects of your exchange and prepare all of your necessary documentation. Contact us today at our downtown Minneapolis office to discuss the details of your 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.

© 2023 Copyright Jeffrey R. Peterson All Rights Reserved

When do you Have to Pay Capital Gains Taxes on 1031 Exchange Property?

Many taxpayers have availed themselves of the tax-saving benefits of the like-kind exchange. But as we’ve discussed before, a 1031 exchange allows you to defer your capital gains tax, not avoid it. So when do you need to pay that tax? In this article, we will explain when you need to pay your deferred capital gains taxes on 1031 exchange property.

Capital Gains Taxes

When you sell a property in a 1031 exchange and move your net proceeds into a new replacement property you are not required to pay those capital gains taxes. However, those taxes do not just disappear. If you sell your replacement property in a standard transaction at any point in the future, you will then have to pay the capital gains taxes on that sale.

Defer Until Death

When it comes to 1031 exchanges of real estate, the ideal long-term strategy is to defer your capital gains taxes until death. If you are ready to sell your replacement property at some point in the future, consider doing another 1031 exchange into a bigger property. That way you can keep your money working for you in continued investments, while avoiding capital gains taxes all your life.

Minneapolis 1031 Exchange

If you are getting ready to sell a piece of real estate, but are dreading the capital gains taxes, consider a 1031 exchange to defer those taxes. A like-kind exchange allows you to avoid a big tax bill on the sale of real estate so long as you move those net proceeds into like-kind property. Contact our Minneapolis qualified intermediaries today to discuss the details surrounding your like-kind exchange. We have been facilitating 1031 exchanges in the Twin Cities and around the country for decades.

• 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.

© 2023 Copyright Jeffrey R. Peterson All Rights Reserved