1031 Asset Exchange Services

What type of real property qualifies for a 1031 exchange?

Any property held for productive use in a trade or business or for investment can be exchange of for like-kind property. “Like-kind” refers to the nature of the investment. Any type of real property can be exchanged for another type of real property. For example: A single family rental can be exchanged for a 3 family rental. And industrial building can be exchanged for a shopping center or a multi-family dwelling.

How do I identify the replacement property?

The like-kind replacement property is identified in a written contract signed by the exchanging party and received by the Qualified Intermediary before the end of the 45-day identification period. The Exchanger may identify three properties of any value, one or more of which must be acquired within the 180 Day Exchange Period.

Is it possible to exchange a replacement property in a different state than the relinquished property is located?

Yes. Using a 1031 for exchanging real property from one state to another is acceptable under IRC 1031. 1031 AES can help connect you with our partners in states throughout the country to find like-kind investment properties.

Is it possible to exchange out of one property and into multiple properties?

It does not matter how many properties you are exchanging in or out of (1 property into 5, or 3 properties into 2) as long as you go across or up in value, equity and mortgage. The only concern with exchanging into more than three properties is working within the 45-day identification period and 180-day acquisition period set forth in IRC 1031.

What are the rules for the correct identification of replacement properties?

Three rules exist for the correct identification of replacement properties. The Three Property Rule dictates that the Exchanger may identify three properties of any value, one or more of which must be acquired within the 180 Day Exchange Period.