What is a 1031 exchange?
A Section 1031 exchange can defer gain when a taxpayer exchanges qualifying real property for like-kind real property. All applicable requirements must be met.
Review the 1031 exchange rules and timelines.
Which property can qualify?
The taxpayer must hold the real property for investment or productive use in a trade or business. Property held primarily for sale does not qualify.
Personal-use property needs separate tax review. United States and foreign real property are not like-kind to each other.
When must I contact a Qualified Intermediary?
Contact a Qualified Intermediary before the relinquished-property sale closes. The exchange agreement and funds structure must exist before the applicable transfer.
Learn what IES handles as Qualified Intermediary.
Can I receive the sale proceeds?
Do not receive or control the sale proceeds. Actual or constructive receipt can cause the transaction to be a sale.
What is the 45-day identification period?
The period starts on the relinquished-property transfer date. The taxpayer must deliver a signed written identification no later than the end of the period.
Check the written identification requirements.
What is the 180-day exchange period?
The exchange period also starts on the relinquished-property transfer date. It ends on day 180 or the applicable federal tax-return due date, including valid extensions, whichever comes first. Special relief requires separate review.
Plan the replacement closing and use the ordinary planning-date calculator.
Can I start before I find replacement property?
Yes. A delayed exchange can start before replacement-property selection. The written identification rules apply after the relinquished-property transfer.
Prepare an exchange before finding replacement property.
Can I buy replacement property before I sell?
A reverse-exchange structure can apply to a purchase-first sequence. Request a review before the replacement-property purchase closes.
Explore reverse-exchange services.
Can I use exchange funds for improvements?
An approved improvement structure can apply exchange funds to applicable work before property receipt. Title, funds, construction, and timing need early review.
Review improvement and construction exchange services.
Can a limited liability company complete a 1031 exchange?
A limited liability company can own qualifying real property. The tax advisor must confirm its federal tax classification and the taxpayer identity.
Review LLC and partnership ownership questions.
Can a partnership interest qualify?
No. An exchange of a partnership interest does not qualify as a like-kind exchange under the general federal rule.
What is boot?
Boot is an informal term for money or non-like-kind property that can cause recognized gain. Liabilities can also affect the calculation.
Understand cash, debt, boot, and replacement value.
How are exchange funds protected?
Ask the Qualified Intermediary about the bank, account title, authorization, verification, insurance, records, and incident process. Get important answers in writing.
Prepare your exchange-funds due-diligence questions.
Can the exchange team give tax or legal advice?
The exchange team can explain its process and documents. The taxpayer's tax advisor and attorney must approve tax and legal conclusions.
What information helps the first review?
Give the property, contract, closing, title, escrow, entity, advisor, lender, funds, and deadline facts. Do not send sensitive data through an unapproved channel.
Use the start-an-exchange checklist.
What if my closing is close?
Call 888-747-1031. Give the next closing date and property sequence first.
Read what to do before an approaching sale closes.
Get the correct answer route
Use the scenario guide to find your situation, or talk with the exchange team. The IRS Form 8824 instructions provide federal source guidance.
This page gives general information. It does not give tax, legal, accounting, investment, lending, title, insurance, or financial advice.