There are many reasons why a taxpayer might benefit from a 1031 exchange of real estate, but many people aren’t sure why they should consider a 1031. In this article, we are going to talk about 3 reasons you might want to consider a 1031 exchange.
Defer Your Capital Gains Taxes
Let’s start with the basics. A 1031 exchange allows you to defer your capital gains taxes when selling real estate. Instead of pocketing the sales proceeds from the sale of a property, you move those proceeds into a replacement property. This allows you to defer your capital gains taxes on the sale and keep your money working for you in a continued investment.
Diversify Your Portfolio
1031 exchanges allow you to get into or out of certain segments of the market. This can help you diversify your portfolio, especially as you get closer to retirement age.
Move to a Different Geographic Area
If you are planning to move to a different area and you don’t want to have the burden of managing a property from afar, you can 1031 exchange out of that property and into a new replacement property located closer to where you are moving.
1031 Exchanges with Commercial Partners
At Commercial Partners Exchange Company, we specialize in facilitating 1031 exchanges under the Internal Revenue Code. Whether you’re exchanging an apartment complex, a piece or farmland, or another investment property – we have the resources to help you through the 1031 exchange process. Contact us today to learn more about our like-kind exchange services and get your exchange off the ground. Our team can answer all of your questions, advise you on property identification, and even prepare your 1031 documents for you. Find us at our downtown Minneapolis office and reach out to our professionals today!