1031 exchanges of real estate offer taxpayers an excellent method for deferring their taxes and keeping their money working for them in new real estate after making a sale. There are several different types of 1031 exchanges – all with their own unique benefits. The build-to-suit exchange is one such type. Give our Mankato qualified intermediaries a call today to get your 1031 exchange off the ground – 612.643.1031.
How to Conduct a Build-to-Suit 1031 Exchange
In a standard forward exchange, the taxpayer sells their old relinquished property, and then rolls all their net proceeds into their new replacement property. But sometimes the replacement property isn’t exactly how you would like it. With a 1031 build-to-suit, or construction exchange, you are able to construct improvements to your replacement property during your 1031 exchange time period of 180 days. The video below briefly explains how build-to-suit construction improvement exchanges function:
Advantages of a Construction Exchange
There are many advantages to the build-to-suit construction exchange. Most importantly, a construction exchange lets you build improvements to your replacement property to meet your desired specifications. In any real estate transaction, it’s rare that your new property exists exactly the way you want it. Many home owners will construct additions, paint walls, and do remodels after purchasing a home. The same goes for commercial real estate. If you find a new property that has a lot of potential but isn’t exactly the way you want it, a build-to-suit exchange allows you to make construction improvements to the property and still avail yourself of the tax saving benefits of a 1031 exchange. Build-to-suit exchanges still need to abide by the 45 day / 180 day time frames, however, so you only have a limited time to compete your desired construction. Nonetheless, construction improvement exchanges are a great way for taxpayers to get exactly the property they want out of their 1031 exchange.
Mankato Build-to-Suit 1031 Exchange Services
There are a lot of complexities to a build-to-suit exchange in Minnesota. Unfortunately, many taxpayers do not take the proper precautions and find themselves with a failed exchange at the end of the process. To avoid these pitfalls, it’s important to involve a qualified intermediary early on in your exchange. An intermediary is a facilitator of 1031 exchanges who can prepare your documents, and make sure you have all of your bases covered during the exchange process. Reach out to our Mankato Build-to-Suit exchange professionals today and get the ball rolling on your 1031 exchange – 612.643.1031.