Under Section 1031, all real property (as it is defined by state law) is considered
“like-kind” with other real property of the same nature or character. The property must be held for investment or productive use in a trade or business.
The following are examples of qualified “like-kind” real
- Raw land for rental property
- Single family rental for multi-family rental
- Retail space for motel/hotel
- Farms/ranch for golf course
- 30-year leasehold interest for fee simple interest
- Non-income producing raw land for income-producing rental property
The use of a qualified intermediary is the most common method to quickly and easily
complete a valid tax-deferred exchange. A Qualified Intermediary (“QI”) typically holds funds during the course of deferred exchanges. Facilitating a forward 1031 exchange with a QI requires the following:
- You sign a contract to sell an asset(s) to the buyer.
- Prior to the property closing, you retain a QI.
- At the closing, the exchange funds are wired or a check is sent to QI.
- The taxpayer completes the Identification of Replacement Property exhibit and returns it to the QI within the
first 45 days after the transfer of the relinquished property.
- You have a maximum of 180 days from the transfer date of the relinquished property to acquire any and all
- At the closing of the property to be purchased, the QI wires the exchange funds or sends a check to complete the
1031EZ | Offices in New York City | Phone 347-871-0318 | firstname.lastname@example.org