Where to find 1031 Exchange Property for Sale

by Angilina Taylor 1031 Exchange Expert, Tax Consultant

Planning a 1031 exchange requires a deep understanding of Section 1031 of IRC. As you may know, a 1031 exchange is a tax-deferred exchange of properties using which an investor can defer up to 100% capital gains tax on exchanging an investment property for another like-kind property. However, to cash in on the opportunity of tax deferment, the investor must abide by 1031 exchange rules laid down by the IRS. Once you are aware of these rules, finding a 1031 Exchange Property for Sale won't be that difficult.

1031 Property Rules -

For closing on a 1031 exchange, an investor must invest the proceeds from the sale of their relinquished property in another like-kind property. For example, you can exchange any investment property such as a multi-family apartment, retail shop, industrial property, etc. for any other investment property. Once the like-kind requirement is fulfilled, you can identify any number of replacement property using one of the following rules -

· The Three-Property Rule - Using this rule, a 1031 exchange investor can identify up to three replacement properties irrespective of their values. Not all the identified properties need to be acquired and the investor can acquire one, two, or all three properties.

· The 200% Rule - As per this rule, a 1031 investor can identify any number of replacement properties as long as the combined market value of all identified properties doesn't exceed 200% of the value of the relinquished property.

· The 95% Rule - Using this rule, a 1031 exchange investor can identify any number of replacement properties as long as the value of the property acquired at the end of an exchange is at least 95% of the combined value of all identified properties.

45-Day Identification Period -

Under a typical 1031 exchange, the investor is required to sell their relinquished property first and then acquire the replacement property. Upon closing on the sale of the relinquished property, a 1031 investor gets 45 days for the identification of the replacement property. Written identification of the potential replacement property or properties must reach 1031 Corp. on or before the midnight of the 45^th day. This time frame of 45 days is known as the Identification Period.

Identifying a replacement property is just the beginning of a 1031 exchange, your job is not done until you acquire the identified property. Every 1031 investor gets 180 days in total (including the identification period) for closing their exchange.

Where to find 1031 Exchange Properties?

In case you're eyeing cheaper buying options for your replacement property, you can find 1031 Exchange Property for Sale throughout the entire USA. However, they may not be available over the internet. Your Qualified Intermediary (QI) can help you in locating properties that fit your budget. In case you haven't found a QI yet, you can reach out to our impaneled 1031 experts and they can help you with almost everything related to your 1031 exchange.

To speak to a 1031 Expert, you can call 888-993-2835 or email us at info@1031Xchange.com