1031 Exchange Property: Everything You Need to Know

How the 1031 Exchange Works & Why It May Be Right For You

  1. Defer Your Capital Gains Tax

  2. Acquire Stable Passive Income

  3. With No Hands-On Management

Field Is Required
Field Is Required

ANSWER A FEW SIMPLE QUESTIONS AND GET CONNECTED WITH A 1031 ADVISOR TODAY

LIKE KIND PROPERTY: WHAT IT IS

For a 1031 exchange to work, both the property you are selling and the property you are acquiring must be like kind. In the video below, we explain what kinds of properties are considered like kind and what types of assets are not qualified for a 1031 exchange.

1031 Property Rules: The Basics

Rule 1: 1031 Exchange Properties Must Be Like-Kind

Like-kind means that both properties must be held for business use, productive use in trade, or investment. The type of property and the quality of the property are not important when determining if they are like kind.

Rule 2: Equity and Debt Must Be Reinvested

Your replacement property must be of equal or greater value than the investment property you are selling. If it is of lesser value, then the difference in value is called boot, and boot is subject to capital gains tax.

Rule 3: Titles Must Be Held By the Same Owner

Ownership records for both properties must be in the same name. This can be your personal name, or it can be the name of a pass-through entity, such as an LLC or Delaware Statutory Trust.

CAN I USE A 1031 EXCHANGE FOR...

Yes
No
Purchasing a Business
no
Buying Raw Land
no
Construction Upgrades
no
Buying Investment Property
no
Stocks and Bonds
no
Purchasing a Second Home
no
Buying a Primary Residence
no
Partnership Shares
no

1031 Exchange Timeline

Closing Date

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Identification Deadline

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Closing Deadline

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If you have already sold your property as part of a 1031 exchange, you have only 45 days in which to identify qualified replacement properties. On average, our advisors will contact you within two business days and have access to DST portfolios with shares that can be closed on in as few as 1-3 days.

How 1031Gateway Can Help