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Commercial Partners Title, LLC is dedicated to providing unparalleled customer service, commercial title insurance solutions, and creating great relationships. It is vital that we continue to find ways to execute on these promises to our clients; and with the advancement of social media, we believe we can take our values and ideals to a new level.

Please take some time to revisit our website and take advantage of our social media presence.

I hope you find our blog to be informational and educational. We want to continue to be your Experts in commercial title insurance.

I welcome your feedback.

Cordially, Mark

October 21, 2021 by Jeff Peterson

1031 Exchange Rules for Identifying Multiple Replacement Properties

In a 1031 exchange, you can identify more than one potential replacement property, provided that you satisfy one of these alternative rules:

The Three-Property Rule

Up to three properties regardless of their market values. All identified properties are not required to be purchased to satisfy the exchange; only the amount needed to satisfy the value requirement.

The 200% Rule

Any number of properties as long as the aggregate fair market value of all replacement properties does not exceed 200% of the aggregate Fair Market Value (FMV) of all of the relinquished properties as of the initial transfer date. All identified properties are not required to be purchased to satisfy the exchange; only the amount needed to satisfy the value requirement.

The 95% Exception

Any number of replacement properties if the fair market value of the properties actually received by the end of the exchange period is at least 95% of the aggregate FMV of all the potential replacement properties identified. In other words, 95% (or almost all) of the properties identified must be purchased or the entire exchange is invalid [except for any Replacement Property actually received within the 45 day identification period].

NOTE: The replacement property received must be substantially the same as property identified within the 45-day limit described above.

October 19, 2021 by Jeff Peterson

2 Rules to Keep in Mind During Your Reverse 1031 Exchange

There are many things to remember when you’re engaging in a reverse 1031 exchange. Here are a few identification rules to keep in mind when you’re doing a reverse 1031 exchange.

Reverse 1031 Exchange Identification Rules

In a reverse exchange, the exchangor must designate the relinquished property within 45 days after the date when the new replacement property is parked with the Exchange Accommodation Titleholder (“EAT”). Here are some important identification rules in a Back-Leg Reverse Exchange where the new replacement property is parked with the Exchange Accommodation titleholder (“EAT”):

Close within 45 days of sale. Any relinquished properties disposed of within the first 45 days after the EAT takes ownership in the replacement property will be deemed to have been identified.
Designate any number of relinquished properties that in total are not more than 200% of the value of the new replacement property that is parked with the EAT.

Contact a Qualified Intermediary

These are just a few of the most basic identification rules in a reverse 1031 exchange. It’s always a good idea to speak with a 1031 qualified intermediary about your exchange to ensure a successful process.

October 18, 2021 by Mark Goodman

A Template of the ALTA 8.1-06 Environmental Lien Endorsement

ENVIRONMENTAL LIEN ENDORSEMENT (ALTA 8.1-06) (Adopted 6/17/2006)

The insurance afforded by this endorsement is only effective if the Land is used or is to be used primarily for residential purposes.

The Company insures against loss or damage sustained by the Insured by reason of lack of priority of the lien of the Insured Mortgage over

any environmental protection lien that, at Date of Policy, is recorded in those records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without Knowledge, or is filed in the records of the clerk of the United States district court for the district in which the Land is located, except as set forth in Schedule B; or
any environmental protection lien provided by any state statute in effect at Date of Policy, except environmental protection liens provided by the following state statutes:

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

Commercial Partners in Minneapolis, MN

At Commercial Partners, we have decades of experience working on commercial transactions of all types. Our team consists of escrow agents, title closers, and underwriters and can help you through all the details of your transaction. Contact us today at our Minneapolis office to learn more.

October 14, 2021 by Jeff Peterson

How to Accelerate Deductions & Defer Gains on Commercial Real Estate

If you want to become financially successful, your first job is to learn how to acquire a lot of money. The next job that you have is to manage your tax liability.

Accelerate Deductions & Defer Gains

To do that you want to accelerate deductions and defer gains. What’s the perfect vehicle to accelerate depreciation deductions and to defer gains?

The perfect vehicle is real estate – particularly improved multifamily real estate. With an apartment building you’re allowed to take a deduction each year for the theoretical wear and tear or wasting of your building. When in fact the property may be going up in value you’re taking a write off on your taxes (what we call a non-cash loss) because of the theoretical wear and tear or depreciation.

Depreciation Deduction

That depreciation deduction can be used in particular by real estate professionals to offset and lower their taxable income from other sources. So real estate agents and other real estate professionals have almost an uncapped amount of losses that they can use against the earned income to make their tax liability as low as possible.