There are many misconceptions about 1031 exchanges of real estate and how exactly they work. We’re here to clear those up. In this article, we are going to answer some frequently asked questions about 1031 exchanges in Michigan.
How Long Do I Have to Complete My Exchange?
All 1031 exchanges are governed by strict time limits. Once you sell your relinquished property, you have a total of 180 days to complete your exchange. The first 45 of those days are set aside as your identification period in which you must identify your replacement properties. There are a few rare exceptions in which these time limits can be amended, but in the majority of cases they must be strictly followed.
Can I 1031 Exchange my Personal Residence?
The short answer is no. You can only 1031 exchange real property that is held for investment or business purposes. That means your primary residence is excluded.
Can Anyone Act as My Qualified Intermediary?
A qualified intermediary is a necessary player on your 1031 exchange team, but not everyone is allowed to act as your QI. Related parties are excluded from acting as your qualified intermediary. That means you can’t have your relative, business partner, attorney, or other related parties as your intermediary.
Real Estate Exchanges Under Section 1031
If you’re looking for help with your next 1031 exchange, you’ve come to the right place! At CPEC1031, LLC, our qualified intermediaries have been helping clients exchange real estate under section 1031 of the Internal Revenue Code for more than twenty years. We can help you by preparing 1031 documents for closing, advising you on replacement property choices, and answering any other questions you may have along the way. Reach out to us today at our downtown Minneapolis office to learn more about our services and how we can help you save money in capital gains taxes with a 1031 exchange.