One of the first things that will amaze you about Minnesota is its affordability. Doing a 1031 exchange in Minnesota can help you save more money in your bank account. Recently, Minnesota was ranked as one of the top 20 for having the lowest rate of unemployment in the United States. What’s more, seventeen Fortune 500 companies call Minnesota home, which means there are great opportunities for employment to keep the economy floating with money. Let’s look at some of the reasons that make Minnesota a paradise for 1031 exchanges.
Employment rates are great
Due to high consumer demand, employment opportunities are at an all-time high. Minnesota is an attractive location for young job seekers. The U.S. Bureau of Labor Statistics stated that Minnesota has an abundance of opportunities to offer millennials at tech firms and health care providers.
Steady gains for the economy
Minnesota’s thriving economy is heading to a diminished unemployment rate than the national average. Better employment opportunities are expanding the housing market and resulting in higher real estate investments in the area. Investments in the state’s private sector, along with the high rate of consumer spending are boosting economic activity in Minnesota.
Best schools and university
Minnesota has a hot housing market for young families looking to move for the region’s spectacular schools and universities. Minnesota is home to educational institutions like the Carleton College and the University of Minnesota, resulting in increasing demand for rental housing.
Jobs in diverse industries
Minnesota’s local economy derives its profit from a wide range of industries, such as technology, financial services, and retail. In Minneapolis, companies are very clear about expansion and look forward to increased investments in machinery and equipment. Cargill, 3M, and Target have their headquarters in Minneapolis. With the economy expanding, employers based in the Twin Cities could hire more.
How Can Deferring Your Capital Gains Taxes Help You?
Let’s first figure out why you would want to defer taxes. Some investors might be under the impression that “If I have to pay them, why not pay them now and get it closed.” Not always!
Imagine you have a duplex rental property across town. A four-plex across the street goes up for sale. You can sell your duplex, settle the capital gains tax, and then purchase the four-plex down the street. However, using a 1031 exchange helps to roll your profits into your next real estate property without getting taxed. It doesn’t mean the tax is forgiven, it’s just deferred indefinitely—but you get a chance to conserve your equity by not being liable to pay taxes on your net profits. Purchasing the four-plex keeps your money running for you, which compounds and builds your wealth faster over time.
Another important reason to defer tax is that there might be a better time to pay tax. One of the important principles in tax planning is deferring taxes if you fall in a high-income bracket and pay taxes when you have a lower income. One smart strategy is to cash out after you retire if you are in a lower tax bracket.
A third objective to defer tax is to manage and control your estate planning systematically. With appropriate estate planning, you can simply keep exchanging properties, which will defer the taxes on the gains indefinitely. Individual tax situations can differ and can be quite complex. It is advisable to seek guidance from a tax professional in a specific situation. If you are planning to do a 1031 exchange in Minnesota, call 1031xchange at 1-888-993-2835 or drop an email: email@example.com