What is a 1031 Exchange?

A 1031 exchange, named after Section 1031 of the Internal Revenue Code, is a tax-deferral strategy that allows investors to sell an investment or business property and reinvest the proceeds into a “like-kind” property, deferring capital gains taxes on the transaction. This powerful tool helps real estate investors preserve capital and grow their investment portfolios.

Also Known As:

• Like-Kind Exchange
• Tax-Deferred Exchange
• Starker Exchange
• Section 1031 Exchange

Whether you’re upgrading properties, diversifying your investments, or consolidating assets, a 1031 exchange can be an effective way to achieve your financial goals.

1031 Exchange Timeline

Strict timelines and adherence to IRS guidelines are crucial for a successful 1031 exchange.

Exchange Period - 180 Days
Investors have 180 days to complete the exchange. They must close on all intended purchases within 180 days of closing the sale property.

Identification Period - 45 Days
Within the first 45 days of the 180-day period, investors must identify up to three possible replacement properties. These are the only properties that qualify for the exchange. There are restrictions that apply to investors wishing to identify additional properties.

For more information, consult a tax professional or contact us directly!