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IRS 1031 Exchange Requirements

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Irs 1031 Exchange Requirement

All IRS 1031 exchanges, including tenant in common exchanges, must adhere to the following requirements:

  • The total money reinvested into the like kind income real estate must equal or be greater than the value of the relinquished income real estate. In other words, 100% of the assets from the sale of the first income real estate must be rolled into the second investment.

  • The amount of equity ( income real estate value minus loan amt. ) of the acquired income real estate must be equal to or greater than that of the income real estate being sold.

  • Each exchange, including tenant in common exchanges, requires the use of a Qualified Intermediary to hold all proceeds of the transaction, prepare any paperwork, and answer any technical questions involved with the exchange.

  • Finally, an IRS 1031 exchange is defined as the exchange of any like kind income real estate or income real estate for another like kind replacement income real estate or income real estate. As such, all income real estate involved in the exchange must be qualified like kind income real estate in order to incur the benefits involved with any 1031 tenant in common exchange.




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