1031 exchanges come in various shapes and sizes. When most people think of a 1031 exchange, they picture the standard forward exchange. A reverse exchange is another type of like-kind exchange that people aren’t as familiar with. If you are interested in learning more about the reverse exchange process and how it can help you save taxes on the sale of real property, contact our Minnesota reverse exchange qualified intermediaries today – 612.643.1031.
How a Minnesota Reverse Exchange Works
A reverse 1031 exchange provides the same tax-deferral benefits of a standard forward exchange, but the steps in the process are different. With a typical forward exchange, the taxpayer sells the relinquished property, then identifies and closes on the replacement property within the 180 day time period. A reverse exchange works backwards. First, the taxpayer closes on their replacement property. Then they sell their relinquished property within the following 180 days. This type of exchange is beneficial in a hot seller’s market where properties are selling fast and you want to lock up a property as quickly as possible.
Cost of a Reverse Exchange
When considering a 1031 exchange, one of the first things most people consider is cost. How much does it cost to do a reverse exchange in Minnesota? The answer to that question can vary considerably depending on different factors, such as:
- The company or qualified intermediary you hire
- The complexities of the reverse exchange
- The amount of properties involved
A typical baseline rate for a simple exchange is $850-$1,500. This fee is a small price to pay to ensure that your exchange goes off without a hitch, and that you can avail yourself of the long-term tax saving benefits provided by a like-kind exchange.
Minnesota Reverse Exchange Company
Reverse 1031 exchanges are typically more complicated than standard forward exchanges. As a result, you want to make sure you get ahead of the game and speak with a qualified intermediary about your situation (ideally, before you even start the process). Give us a call today to talk with a Minnesota qualified intermediary about your reverse like-kind exchange Our qualified intermediaries have been helping taxpayers throughout Minnesota with their exchanges for decades. We are available now to walk you through the exchange process – 612.643.1031.