There are several different ways that you can structure a 1031 exchange – from forward exchanges, to reverse exchanges, and everything in between. A build-to-suit exchange is one such unique type of 1031 exchange structure that can be beneficial for taxpayers who want to make improvements on their new replacement property.
Our Minnesota qualified intermediaries have decades of experience facilitating build-to-suit exchanges in Rochester and the surrounding area. Give us a call today to discuss your project and what your options are for a 1031 exchange – 877.373.1031.
Build-to-Suit Exchange Defined
A build-to-suit exchange is a like-kind 1031 exchange in which the taxpayer doing the exchange builds a new replacement property (or constructs improvements to an existing property) before completing the exchange. In a standard 1031 exchange, you sell your relinquished property and roll all of your net proceeds into a new replacement property. But what if the new replacement property doesn’t quite fit your needs? For example, what if you own a business and you’re 1031 exchanging into a new property to accommodate a growing work force? This is where a build-to-suit exchange comes in to save the day (and your taxes). With a build-to-suit, you can make any necessary construction improvements to your replacement property before ending your exchange. That way you have the property built exactly to your specifications and you still get to defer your capital gains tax.
Benefits of a Rochester Build-to-Suit Exchange
There are many benefits to a build-to-suit exchange. Here are a few:
- You get the replacement property built to your exact specifications.
- You get to defer all of your net proceeds from the sale of your old property and re-invest those into the new replacement property.
An important thing to remember with build-to-suit exchanges is that any construction or improvements to the replacement property need to be completed within the standard 180 day exchange period.
Rochester Build-to-Suit Exchange Services
Build-to-suit exchanges can be tricky. There are a lot of hoops you have to jump through in addition to the typical 1031 requirements. Make sure you have an experienced qualified intermediary by your side during the process. Our intermediaries have been working in the Rochester area for many years. Contact us today to get started with your build-to-suit exchange – 877.373.1031.