1031 Exchange Rules




1031 Exchange Rules

1031 Identification Rules

All exchanges require that property owners identify up to three potential replacement investment properties within 45 days of the close of escrow on the relinquished investment property. Furthermore, acquisition of said identified investment properties must occur within 180 days of close on the relinquished investment property. All exchanges must comply with at least 1 of the 3 following rules:

  • Three-Investment Property Rule - allows the exchanger to identify up to, but no more than 3 potential replacement investment properties within the acquisition period.

  • The 200% Rule - States that, in the event that three or more replacement investment properties are used, their total market value must not exceed 200% of the value of the investment property that is being relinquished.

  • The 95% Exception - Finally, in the case that rules 1 and 2 do not apply, the aggregate value of the like kind investment properties must account for at least 95% of the value of the investment property being sold in order for the exchange to qualify.

    Contact us for more questions regarding 1031 exchanges and tenants in common exchanges and we will put you in contact with a specialist in your area.


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