Monday, December 11, 2023
Before you (The exchanger) begin the Exchange process, be sure to consult with your tax or financial advisor to ensure that a 1031 Exchange is right for you.
Step one – Sale of the Relinquished Property
Before the sale of the first property (Relinquished Property), the Exchanger must complete the basic Exchange documentation, At closing, the proceeds are delivered directly to the Qualified Intermediary.
Step Two – Identification of Replacement Property
The Exchanger must identify the property to be purchased (Replacement Property) within 45 days following the sale of the Relinquished Property. The Exchanger may generally identify three properties as a potential Replacement Property, or more under alternate rules of identification.
Step Three – Purchase of the Replacement Property
The Exchanger must obtain the Replacement Property within 180 days following the sale of the Relinquished Property, which must be indentified property. At closing, the proceeds are paid directly by the Qualified Intermediary, and the Exchanger receives the Deed to the Replacement Property