1031 Investment Exchange Rules

1031 Investment Exchange Rules

1031 Identification Rules

All exchanges require that real estate investors identify up to three potential replacement income real estate within 45 days of the close of escrow on the relinquished income real estate. Furthermore, acquisition of said identified income real estate must occur within 180 days of close on the relinquished income real estate. All exchanges must comply with at least 1 of the 3 following rules:

Three-Income Real Estate Rule - allows the exchanger to identify up to, but no more than 3 potential replacement income real estate within the acquisition period.

The 200% Rule - States that, in the event that three or more replacement income real estate are used, their total market value must not exceed 200% of the value of the income real estate that is being relinquished.

The 95% Exception - Finally, in the case that rules 1 and 2 do not apply, the aggregate value of the like kind income real estate must account for at least 95% of the value of the income real estate being sold in order for the exchange to qualify.

Contact us for more questions regarding 1031 investment exchanges and tenancy in common exchanges and we will put you in contact with a specialist in your area.

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