E. The Exchange Requirement
One property must be exchanged for another property, rather than sold for cash. The exchange is created through a qualified intermediary and required exchange documentation.

F. Time Limits
The taxpayer is required to identify the replacement property within 45 days after the transfer of the relinquished property, AND must close on replacement property before the earlier of (a) 180 days after the transfer of the relinquished property, or (b) the due date of the taxpayer’s federal income tax return (including extensions) for the year in which the relinquished property is transferred. Time limits are strictly construed and implemented.

G. Alternative and Multiple Properties
Whether one property or more than one property is transferred by the taxpayer as part of one exchange, the number of replacement properties that may be identified is:
(1) Up to three properties, without regard to their fair market value. (The Three-Property Rule)
(2) More than three properties, if the total fair market value of all these properties at the
end of the 45-day identification period does not exceed 200% of the total fair market value of all properties relinquished in the exchange. (The 200% Rule)

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The information on this website is an educational resource only, and not intended as legal, accounting, or tax advice of any kind.
It is recommended that you consult with your own attorney or tax advisor for details before choosing to engage in a 1031 Exchange