How it Works

1031 Exchange Overview and Benefits

A 1031 exchange, also known as a like-kind exchange, is a tax-saving strategy available to real estate investors. This strategy allows investors to defer the payment of capital gains tax on the sale of a property by reinvesting the proceeds in a like-kind property within a certain timeframe. To qualify for a 1031 exchange, the properties being sold and purchased must be used for investment or business purposes, and they must be like-kind.

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Like-kind properties are those that are of the same nature or character. For instance, an investor could exchange a rental property for another rental property, or a commercial property for another commercial property. However, an investor cannot exchange a rental property for a vacation home or a commercial property for a piece of vacant land.

The 1031 exchange process is governed by strict guidelines that must be followed to qualify for tax deferral. First, the investor must identify a replacement property within 45 days of the sale of the original property. The replacement property must be of like-kind and have a value equal to or greater than the property being sold. Once the replacement property has been identified, the investor must complete the purchase of the replacement property within 180 days of the sale of the original property. During the 1031 exchange process, the proceeds from the sale of the original property are held by a qualified intermediary, who facilitates the exchange and ensures that the investor follows the guidelines set forth by the IRS. The investor is not allowed to receive any of the proceeds from the sale of the original property, as doing so would disqualify the exchange.

Like-kind properties are those that are of the same nature or character. For instance, an investor could exchange a rental property for another rental property, or a commercial property for another commercial property. However, an investor cannot exchange a rental property for a vacation home or a commercial property for a piece of vacant land.

The 1031 exchange process is governed by strict guidelines that must be followed to qualify for tax deferral. First, the investor must identify a replacement property within 45 days of the sale of the original property. The replacement property must be of like-kind and have a value equal to or greater than the property being sold. Once the replacement property has been identified, the investor must complete the purchase of the replacement property within 180 days of the sale of the original property. During the 1031 exchange process, the proceeds from the sale of the original property are held by a qualified intermediary, who facilitates the exchange and ensures that the investor follows the guidelines set forth by the IRS. The investor is not allowed to receive any of the proceeds from the sale of the original property, as doing so would disqualify the exchange.

Some of the Companies that have Referred Us Business

We have worked with various companies, just a few we have partnered with. You can be assured that your 1031 Exchange will be handled appropriately.