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 income real estate must be reinvested in the replacement income real estate.

Also, the amount of equity held in any like kind income real estate for reinvestment must be greater than or equal to that of the relinquished income real estate.

Third, each real estate investor must use a Qualified Intermediary (QI) to oversee the transaction. A QI is a qualified individual that prepares the paperwork, holds all proceeds from the transaction, and provides any technical advise on the exchange process.

Finally, all 1031 exchanges require the exchange of like kind income real estate for other like kind property. A definition of such may be found in internal revenue code.

For more information on 1031 exchanges or tenant in common exchanges, or to be put in contact with a licensed 1031 realtor, contact us today!