GLOSSARY | BANK GUARANTEE | ID CHECKLIST | CALCULATOR
EXCHANGE BASICS
A 1031 Exchange is the swap of like-kind real estate or personal property for other like-kind real estate or personal property structure pursuant to § 1031 of the Internal Revenue Code. State, federal and depreciation recapture taxes are deferred and the tax savings is invested in the new property. Buying power is increased and taxes are avoided.
WHENEVER INVESTMENT PROPERTY IS BEING SOLD:
Reserve the right to close the sale as part of an Exchange; leave options open.
INTERRELATEDNESS:
To be an exchange, the sale and purchase must be interrelated. The QI (Qualified Intermediary) establishes this important relationship.
IDENTIFICATION PERIOD:
45 days from the close of the Sale Amherst must receive your dated and signed list of potential replacement properties – unless all are purchased prior to the 45th day.
Review our Letter of Identification Checklist
EXCHANGE PERIOD:
Within 180 days of the close of the Sale the exchange must be completed.
TYPES OF EXCHANGES:
CONCURRENT or SIMULTANEOUS EXCHANGE:
Purchase closes same day or 1st business day following the close of the SaleDEFERRED EXCHANGE: 45 days to ID; 180 to complete
PART EXCHANGE / PART SALE OF PERSONAL RESIDENCE:
You can sell a percentage of a property as an exchange if it has been held for productive use in a trade or business or for investment.IMPROVEMENT or CONSTRUCTION EXCHANGE: QI can take title to Replacement Property and pay for improvements managed by client to utilize excess exchange funds and increase property value. QI sells improved property to client within 180 days.
REVERSE EXCHANGE: Replacement property (the new property) is purchased before relinquished property can be sold.
