What you need to know about your 1031 Exchange
What is Exchangeable?
Any real property held for a period of time for income or investment purposes is exchangeable for any real property intended to be held for income or investment purposes.
Understanding "Like Kind"
In the case of real estate exchanges, the "like‐kind" standard is usually easy to satisfy. Generally, any type of real property interest is like‐kind to any other type of real property. The properties do not have to be of the same nature.
30+ year leaseholds
Oil and gas royalties
Partial interests of real property held via TIC (tenants in common)
DST (Delaware statutory trust).
This can include, but is not limited to:
Timeline & Rules
Open in Escrow
The QI need to be involved before the close of your relinquished property. Make sure you are working with a QI while in escrow, as day one of your 1031 exchange starts once you close.
3 Property Rule
You only need to identify and close on one property, but you can identify up to 3 properties.
45 days to Identify
To receive the full 180 days to close on replacement property, you must designate/identify the properties you wish to pursue to the IRS and the QI by day 45.
This rule comes into effect if you choose to identify more then 3 properties. In this case, you can identify and close on as many properties as you like, so long as the total replacement value identified is not greater then 200% of the total relinquished value.
180 Days to Close
You have 180 days to close on your replacement property(s). This timeline starts from the closing date of your relinquished property.
This rule comes into effect if you choose to identify more then 3 properties and the total replacement value identified is more then 200% of total relinquished value. In this case, you must close on 95% of the identified properties.