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ABOUT 1031 EXCHANGE
1031 Exchange
A 1031 Exchange gets its name from Section 1031 of the U.S. Internal Revenue Code, which allows you to defer paying capital gains taxes when you sell an investment property and reinvest the proceeds from the sale within certain time limits in a property or properties of like kind and equal or greater value.
Under the IRC1031 rules, A qualified intermediary (QI) must facilitate a 1031 exchange. The QI is a person who holds funds from the relinquished property and uses them to acquire the new replacement property. These funds never come into contact with the property owner, who is involved in the 1031, per the IRS 1031 rules.
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If you do not have a QI, we can recommend some that are ready and willing to help!
Don't forget your stopwatch! The IRC-1031 also has a 45/180 day rule. The 45 day, 180 day rule is measured from when the relinquished property closes. The investor has 45 days to nominate (identify) potential replacement properties and 180 days to close on the replacement property. The exchange is completed in 180 days, not 45 days plus 180 days.
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