1031 Exchange Requirements

Adhering to IRS Requirements is Paramount

While the benefits of 1031 exchanges are clear, the process of doing a 1031 exchange is complex and involves several hurdles. TII is your advocate in navigating the complexities of a 1031 Exchange. Below are several of the rules required for a successful exchange.

Qualified Intermediary (QI)

A Qualified Intermediary is required by the IRS to successfully complete the exchange. A QI must hold the proceeds during the exchange. If you control the funds in any way, you may risk disqualifying the entire exchange.

45-Day Identification Period

The IRS states that an exchanger has 45-days* from the date they sell their property to identify potential replacement property(ies).

180-Day Timeline

The exchanger needs to complete the exchange within 180 days* of selling the relinquished property or by their tax return's due date (including extensions), whichever comes first.
Day 1
By Day 45
By Day 180

Sell Your Property

Find A Replacement

Close on New Property

* All days are calendar days, regardless of whether the day falls on a holiday or weekend.

Multi-Property Exchange

An exchanger can exchange one or more relinquished properties for one or more replacement properties in a single exchange. The total fair market value of the replacement properties acquired cannot exceed 200% of the fair market value of the relinquished property sold.

Relinquished Property Debt

The mortgage amount on the Replacement Property(ies) must equal or exceed the mortgage paid off at sale of the Relinquished Property.