Basic Requirements of Exchanges

The IRS has certain prerequisites, rules and restrictions that must be strictly adhered to when conducting a 1031 Exchange. Because of this, you will need to follow six primary rules for your Exchange to meet stringent IRS guidelines.

The principals of Exchange Accommodators are familiar with these guidelines and have the experience it takes to conduct a successful exchange. Because we are committed to examining every detail and keeping you up-to-date with the process, you can rest assured that your Exchange will be handled with the utmost care.

The regulations, court cases and IRS rulings that apply to your Exchange are ever changing. It is important to choose a Qualified Intermediary like Exchange Accommodators that understands these laws and carefully monitors new legal developments.

Real Property Use
Both your old and new properties must qualify as investment or business use. If both properties pass this test, you can exchange nearly any type of real estate.

45-day Identification Period
You have 45 days from the closing of your sale to list the properties you may want to purchase. There are no exceptions to this deadline.

180-day Exchange Period
From the sale closing date, you have 180 days to close on the purchase of one or more properties from the 45-day list. Again, there are no exceptions to this deadline.

Qualified Intermediary (QI)
The IRS mandates you use a QI to prepare the legal documents for your exchange. Because the QI must be independent, it cannot be your friend, employee, broker, or even your accountant or attorney. The QI also holds your money so that you do not have access to it. Having constrained receipt would disqualify your exchange.

Proper Title Holding
You must purchase and take title to your new property exactly as you held title to your old property. Consult with your CPA/Attorney regarding title exchanges after the exchange.
Reinvestment Requirement
To defer all of your capital gain tax, you must buy a property equal or higher in value than the one you sold. Also, you must reinvest all of the cash proceeds from your sale and replace any debt on the property sold.

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