1031 Exchange Requirements
1031 Exchange Requirement
There are four distinct requirements applicable to all
1031 exchanges :
In order to qualify as a 1031 exchange, 100% of the monies earned through the sale of any investment property must be reinvested in the replacement investment property.
Also, the amount of equity held in any like kind investment property for reinvestment must be greater than or equal to that of the relinquished investment property.
Third 1031 Exchange Requirement: The third requirement of Section 1031 exchanges is that you must use a Qualified Intermediary (QI). The QI prepares the exchange documents, holds the cash proceeds from the sale, and should answer any questions you may have during the exchange.
Fourth 1031 Exchange Requirement: Both relinquished and replacement investment property must be held for productive use in a trade or business or held for investment and investment property must be like-kind. Like-kind refers to the nature of the investment property. The IRS definition of Like-Kind is any investment property held for productive use in a trade or business or held for investment purposes.
In order to complete your next 1031 exchange or tenants in common exchange, contact us today. We can put you in contact with a specialized TIC advisor at no cost to you.