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Here is a summary of the 1031
Exchange rules:
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All relinquished (old) and replacement (new)
property must be vacant land, rental property or property used for trade,
business or investment.
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The property must be held for at least a year
and a day to qualify for a 1031 Exchange.
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If the properties meet these requirements, you
may exchange any real estate for any other type of real estate.
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You cannot have actual or constructive control
of any of the proceeds received from the sale of the old property.
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By law, all money is held by a Qualified
Intermediary (also referred to as an Accommodator or Facilitator). You
cannot have an associate or employee, your attorney, broker or CPA hold the
proceeds, nor can you leave the proceeds in escrow until the second property
is purchased.
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You have 45 calendar days from the date
of closing on the old property to identify a list of properties, from which
you will purchase the new property.
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From the date of closing, you have 180
calendar days to close on one or more of the properties from your 45-day
list.
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The titleholder on the old property must be
the same titleholder on the new property.
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You must reinvest all cash proceeds from the
sale, and purchase a new property or properties of equal or greater value,
in order to avoid taxation on the gains. |
