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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!

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