Types of 1031 Exchanges in Bemidji, MN
1031 exchanges come in several different forms, each with its own benefits. Below are the three most common types of 1031 exchanges in Bemidji, MN:
Forward 1031 Exchange. The most common type of exchange in which a relinquished property is sold and then the sales proceeds are reinvested into a replacement property.
Reverse 1031 Exchange. A forward exchange done in reverse order. In a reverse exchange, the replacement property is purchased first, and the relinquished property is sold after the fact.
Build-to-Suit 1031 Exchange. This type of exchange involves construction improvements to the property as a part of the 1031 exchange process.
Rules that Govern Bemidji 1031 Exchanges
It’s important to remember that all Bemidji 1031 exchanges are governed by strict rules that you need to abide by in order to execute a successful exchange.
Deadlines. First off, you only have a limited amount of time (180 days) to complete your 1031 exchange. There’s another timeframe within that 180 day period – the first 45 days – during which you must give written identification of your replacement properties.
Qualified Use. You also need to make sure that all properties involved in your 1031 exchange are held for qualified use. All like-kind exchange property must be held for use in your trade or business, or for investment purposes.
These are just a few of the many rules that you need to follow in order for your exchange to be a success. A Bemidji qualified intermediary can help ensure you follow all of the required rules and regulations.
Benefits of Bemidji Like-Kind Exchanges
There are a multitude of benefits to conducting a like-kind exchange in Bemidji. The most substantial benefit is tax-deferral. When you do everything correctly, a Bemidji 1031 exchange allows you to defer all of your capital gains taxes on the sale of your like-kind property. There are many other benefits too, such as moving your investment into a different industry or geographic location. For example, you could exchange out of a retail space in Rochester and exchange into a rental property in Bemidji.
Start Your 1031 Exchange in Bemidji, MN
Start the process of capital gains tax deferral via 1031 exchange today by reaching out to a Bemidji qualified intermediary at CPEC1031, LLC. We have more than two decades of experience in the 1031 exchange industry. With our extensive experience, we have dealt with all types of 1031 exchanges. No matter how complex your exchange might seem, we have the expertise and resources to help guide you through it. Reach out to our team today to set up a time to chat with our experienced intermediaries.