The 1031 Exchange: How It Works
(Keep your CPA Involved!)
Cash Out On Your Property
(Day 0)
Your first step is to sell your existing property (relinquished property). The sale proceeds must be held by a Qualified Intermediary (QI) to prevent direct receipt of funds.
Identify Your Next Acquisition
(Within 45 Days)
Step two is to identify your target asset(s). You have 45 Days from the original sale to formally identify up to three properties in most scenarios.
Trade UP and Close On Your Asset
(Within 180 Days)
Step number three is perhaps the most important. You must close on your replacement property within 180 days of the sale of the relinquished property.
This is the part we love to celebrate with every real estate investor. You've secured your next asset, executed a savvy financial strategy, and we had the privilege of partnering along the way. It's like real-life Monopoly!
CONSULT WITH YOUR CPA AND DO NOT FORGET TO FILE THE APPLICABLE IRS FORM(S) WITH YOUR TAX RETURN.