Frequently Asked Questions

Any individual or business entity owning investment property can benefit from a 1031 exchange. This includes residential and commercial real estate investors, developers, and business owners who hold property for investment or business purposes. As long as the investor is willing to take some or all of the sales proceeds from the “relinquished property” and invest it into a “replacement property” he/she/it can benefit from a 1031 exchange.

All types of real property located in the U.S. can qualify for a 1031 exchange as long as it is held for an investment or business purpose. Residential rental property, commercial buildings, and land all qualify.

In general, all real estate in the U.S. that is used for investment or business purposes would be considered “like-kind” to any other type of real estate in the U.S. used for the same purposes. For example, you can exchange a beach house being used as a rental property for farmland or you can exchange an apartment complex for a skyscraper. All would be considered properties of like-kind for the purposes of a 1031 exchange.

Yes, there are strict deadlines that must be followed. The most crucial deadlines include identifying potential replacement properties within 45 days of selling the relinquished property and completing the exchange by acquiring the replacement property within 180 days of the sale of the relinquished property.

It is advisable to use an experienced qualified intermediary (QI) when conducting a 1031 Exchange. A QI helps to ensure that the exchange meets all the necessary requirements and that the funds are handled properly to maintain tax-deferred status.