Are you an investor who is considering the sale of a commercial property and seeking strategies to optimize your returns? The 1031 exchange, also known as a like-kind exchange, might be the ideal solution. This tax-deferral tool allows investors to exchange one investment property for another, or even multiple properties, and reinvest the proceeds without incurring capital gains taxes.
Good news—this rule extends to commercial real estate, given its classification as investment property. This allows you to swap a commercial property for another Investment property (commercial, multifamily, etc). Yet, remember that it’s an IRS-regulated process, and adhering to distinct rules and guidelines is a priority.
In this article, I will break down the essential 1031 exchange rules for commercial property to help you maximize this tax-deferral strategy.
1031 Exchange Rules for Commercial Property
1031 exchanges are an excellent option for investors to maximize their sales. Instead of being on the hook for capital gains taxes that can eat up as much as 35% of your profit, you can reinvest your entire proceeds into a new property.
However, like any IRS-regulated tool, there are strict rules that you need to be aware of. Generally, 1031 exchanges for commercial properties work much like they do for any other investment property.
Seek Professional Guidance
Given the complexity of 1031 exchanges, you must always consult a tax professional or financial advisor before committing to the process. You will want expertise to ensure that you effectively navigate the rules and regulations of 1031 exchanges to enjoy its tax-deferral benefits.
Selling Your Commercial Properties? We May Have a 1031 Exchange Option for You
Investors decide to sell their commercial properties for a multitude of reasons. It could be in response to a shift in market demand for commercial real estate, a strategic move to diversify their investment portfolio, a realignment of their investment objectives with changing market trends, or simply a desire to step away from property management responsibilities.
Regardless of the reason, Canyon View Capital provides investors with valuable solutions to transition into new properties without the burdens of property management, all while preserving the benefits of real estate investments.
Canyon View Capital Offers 1031 Exchange Options for Investors
Knowing the 1031 exchange rules for commercial property is a huge first step in the next stages of your investment journey. If you’re looking for replacement property options for your 1031 exchange, we may be able to help.
At Canyon View Capital, we eat, breathe, and sleep multifamily real estate. It’s our passion and the core of what we do. Our management team boasts a cumulative 60+ years of real estate experience, and we’ve channeled that passion into a thriving operation, now proudly managing multifamily properties valued at over $1 billion1.
We offer investors like you the ability to exchange into one or more of our multifamily properties located in America’s Heartland as Tenants in Common. By doing so, you can enjoy passive rental income without worrying about managing properties while deferring your capital gains taxes.
Still need more information on the IRA Alternative Investments?
12$1B figure based on aggregate value of all CVC-managed real estate investments valued as of March 31, 2023.
Gary Rauscher, President
When Gary joined CVC in 2007, he brought more than a decade of in-depth accounting and tax experience, first as a CPA, and later as the CFO for a venture capital fund. As President, Gary manages all property refinances, acquisitions, and dispositions. He works directly with banks, brokers, attorneys, and lenders to ensure a successful close for each CVC property. His knowledge of our funds’ complexity makes him a respected executive sounding board and an invaluable financial advisor.
