South Dakota build-to-suit exchanges under section 1031 of the Internal Revenue Code are excellent vehicles for tax deferral. However, many people aren’t aware of their tax saving benefits.
What is a South Dakota Build-to-Suit Exchange?
A build-to-suit exchange differs in a few key ways from other types of 1031 exchanges, though the ultimate benefit of capital gains tax deferral remains the same.
In a build-to-suit exchange, you sell a relinquished property and subsequently move your net proceeds into a like-kind replacement property. However, in between the sale and acquisition, you are able to construct improvements to the replacement property prior to the completion of the exchange. Keep in mind that you only have 180 days to complete any construction on the property.
Benefits of a South Dakota Build-to-Suit Exchange
There are many benefits to doing a South Dakota build-to-suit exchange. First of all, just like with any other 1031 exchange, a build-to-suit exchange allows you to defer your capital gains taxes. In an outright sale, this money would go straight to the government, but in a 1031 exchange you get to keep that money working for you in a continued investment. A build-to-suit exchange also allows you to construct improvements to your replacement property as a part of the exchange process. This is a great opportunity for taxpayers who can’t find an ideal out of the box replacement property. You can exchange into a less than ideal replacement property and make some improvements to it before you complete your exchange.
Contact a South Dakota Build-to-Suit Exchange Company
If you’re thinking about selling your South Dakota investment property in a build-to-suit exchange, you’ve come to the right place. CPEC1031, LLC assists clients with all types of like-kind exchanges under section 1031 of the Internal Revenue Code. Our qualified intermediaries are well suited to guide you through the process and make sure you are able to defer 100% of your capital gains taxes on the sale. Contact us today to learn more about our services and see how we can help with your South Dakota build-to-suit exchange.