Breaking will be offline for scheduled maintenance Saturday July 24 5 AM US EST to 8:30 AM EST. We apologize for the inconvenience.


Thank you for sharing!

Your article was successfully shared with the contacts you provided.

DENVER-Carpe Diem, or “Seize the Day” is probably the best-known Latin phrase thanks to Robin Williams in the movie the “Dead Poets Society.” But Kenneth C. Cohen, a Denver-based expert on 1031 tax-deferred exchanges might say Carpe Momento, or seize the moment, when it comes to using one of the last significant tax advantages remaining for real estate investors in Colorado and elsewhere.

Cohen, division manager with Denver-based Asset Preservation, a 1031 tax deferred exchange “Qualified Intermediary,” says real estate investors should immediately acquire a desirable replacement property prior to selling the relinquished property. Investors, Cohen says, can protect their exchanges that way and eliminate the pressure-filled problem presented by the 45-day identification period for a replacement property.

He notes tax-deferred exchanges have been part of the tax code since 1921. An exchange allows an investor to dispose of a property and defer the capital tax liability, increasing the earning power for the investor.

Increasingly, he says, investors are exploring creative uses of 1031 exchange strategies.

“Many Colorado investors are discovering they can build a brand-new investment property, all with tax-deferred dollars,” he says. “In fact, more investors are combining a reverse exchange with an improvement exchange and creating a perfect opportunity to purchase the new property first–and begin making improvements to this property before the relinquished property is sold to a buyer.”

Also, the purchase of fractional ownership interest in commercial real estate along with other co-owner is becoming increasingly popular, he says.

“The advantage of these tenant-in-common programs is that investors are able to participate in the benefits of a larger commercial purchase opportunity which often can result in a relatively passive investment generating a predictable monthly cash flow,” Cohen says. “Many shopping centers, anchored by a tenant like a national grocery store chain are being sold in this manner.”

Also, investors can convert a rental to a residence, which could mean getting up to $500,000 tax free from a couple selling their property, as long as they live in the former rental for 24 months out of a 60-month period. Investors with vacation homes in resorts, such as the ski resorts of Colorado, can look at vacation home exchanges, Cohen advises.

“Real estate located in resort or vacation areas may qualify for an exchange if the owner can establish that their “intent” was to hold the property for investment,” Cohen says. “Property owners in many resort destinations are deferring 100% of their capital gain taxes and exchanging for more desirable properties.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt. APARTMENTS Fall 2021Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.