1031 Exchange Rules
1031 Exchange Rules
1031 Identification Rules
1031 Exchange Rules require investment property investors to identify like kind
commercial investment properties for replacement within 45 days of the close of escrow on the relinquished commercial investment property. Furthermore, all replacement
commercial investment properties must be acquired within 180 days of close on the relinquished commercial investment property. All 1031 exchanges must comply with one of the follow three rules:
The Three-Commercial Investment Property Rule - This rule allows the exchanger to identify up to, but no more than 3 potential commercial investment properties as qualified replacement commercial investment properties within the allotted time frame.
The Two Hundred Percent Rule - Stipulates that, if three or more replacement commercial investment properties are used in the exchange, their aggregate value must not exceed 200% of the value of the commercial investment property that is being relinquished.
The Ninety-five Percent Exception - Finally, if circumstances are such that rules 1 and 2 do not apply, the aggregate value of the like kind replacement commercial investment properties must account for at least 95% of the value of the relinquished commercial investment property at the time of sale in order for the exchange to qualify.
To find out more, contact us and we will put you in touch with a 1031 broker in your area.