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, each property owner 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 investment property for other like kind property. A definition of such may be found in IRC section 1031.
For more information on 1031 exchanges or tenants in common exchanges, or to be put in contact with a licensed TIC advisor, contact us today!