1031 Exchange Rules
1031 Exchange Rules
1031 Exchanges require an acquisition period of 180 days, during which the
property owner must identify potential properties for the exchange (within 45 days) and acquire said
investment property or investment properties. The acquisition period begins at the close of escrow on the relinquished investment property. Furthermore, all
1031 exchanges must adhere to one of the following rules:
The Three-Investment Property Rule states that the exchanger must identify up to, but no more than three potential investment properties during the acquisition period.
The Two Hundred Percent Rule - Stipulates that, if three or more replacement investment properties are used in the exchange, their aggregate value must not exceed 200% of the value of the investment property that is being relinquished.
The Ninety-five Percent Exception - Finally, if circumstances are such that rules 1 and 2 do not apply, the aggregate value of the like kind replacement investment properties must account for at least 95% of the value of the relinquished investment property at the time of sale in order for the exchange to qualify.
To find out more, contact us and we will put you in touch with a TIC advisor in your area.