Preserve Your Wealth with 1031 Exchange Services

Transform Real Estate Sales into powerful wealth building opportunities. Our 1031 Exchange services help you defer capital gains taxes while strategically diversifying your real estate portfolio —protecting what you’ve built and creating pathways for continued growth.

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HOW DO 1031 EXCHANGES WORK?

A 1031 exchange allows real estate investors to swap one investment property for another while deferring capital gains taxes. However, navigating the process can be complex without a clear understanding of the rules.

Key Rules to Know

Planning a 1031 exchange? Understanding the essential rules is crucial.
Our FAQ section covers the most important considerations to ensure a smooth exchange.

HOW DO YOU KNOW YOUR CAPITAL GAIN?

We simplify the 1031 exchange process with step-by-step guides and FAQs, so you know exactly what to expect. Let us help you make informed decisions with confidence.

1031 Exchange Frequently Asked Questions

What is a tax-deferred exchange?

It is a process that allows a taxpayer to exchange an investment or business property and defer the payment of the capital gains tax. Normally there is a delay between settlements of the property being relinquished and the replacement property.

What are the reinvestment requirements in an exchange?

To be totally tax free, the acquisition cost of the replacement property(ies) must be equal or greater than the adjusted sale price of the relinquished property. The total cash equity (equity less selling costs) from the relinquished property must be held in a qualified escrow account and must be reinvested in the replacement property(ies). The cash not reinvested (known as “cash boot”) is subject to capital gains tax. The replacement property must have mortgage debt or new cash added, equal to or greater than the mortgage paid off, or assumed on the relinquished property.

How are capital gains figured?

The potential capital gains that can be deferred is simply the profit plus all the depreciation taken on the property being relinquished.

What is the criteria for a deferred exchange?

The properties must be like-kind. This means that the property being relinquished must currently be used as an investment or business property. It is not important how the buyer plans to use the property. The replacement property the exchanger desires to purchase must be identified in 45 days, be anywhere in the United States, and be settled in 180 days. It is not important how the property is currently used, only that it will be used by the exchanger as an investment or business property. Like-kind investment or business property includes townhouse rentals, land, farms, office condos, warehouses, vacation rentals, etc.

What is the first step in conducting a deferred exchange?

Agents or investors should contact Irexa Financial to discuss the proposed exchange and obtain the necessary contract addendum for the property to be relinquished. There must be an exchange agreement signed by both the exchanger and Qualified Intermediary (QI) before the first relinquished property settlement.

How is the replacement property identified?

Normally, up to three potential replacement properties are identified by address or legal description. The identification must be in writing, signed by the exchanger and delivered to the qualified intermediary.

Do all properties qualify for a 1031 exchange?

To be a successful tax-deferred exchange, certain criteria must be met for the real estate to be like-kind. Basically, these are: – Both properties must be in the United States. – The Relinquished Property currently must be used by the exchanger for investment, business, rental or production of income. -The exchanger must hold the new Replacement Property for investment, business, rental or production of income. -The Replacement Property must be identified within 45 days. -The Replacement Property must be received within 180 days (or the federal tax due date, including extension, if earlier).

Can I do a 1031 Exchange After I sell the property?

No. To initiate an exchange, you must engage our services before closing on your relinquished property. Once the sale is finalized, you will no longer be eligible to begin a 1031 exchange. Plan ahead to maximize your tax benefits.

1031 Exchanges Must Be Like-Kind To Succeed

1031 Exchange Frequently Asked Questions

Properties that qualify:

Commercial Property

Rental Property

Farm Land

Apartment Buildings

Delaware Statutory Trusts (DST)

Properties that DON’T qualify:

Commercial Property

Second Homes

Dealer Property

Vacation Rentals

Properties Purchased From Family Members

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Get Your Free Guide Now

Master the Power of 1031 Exchanges

We created this comprehensive guide to help real estate investors understand how to leverage 1031 exchanges to build and preserve wealth:

  • Learn how to defer capital gains taxes while strategically repositioning your real estate portfolio
  • Understand the critical timelines and identification rules that must be followed for a successful exchange
  • Discover strategies for meeting debt and equity requirements to maximize tax deferral
  • Explore how to properly select and vet a Qualified Intermediary to protect your exchange funds
  • Navigate potential risks and compliance requirements to ensure your exchange is validated

Download our exclusive guide to learn how you can defer taxes on your real estate sales while building a stronger, more diversified investment portfolio for long-term wealth creation!

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