1031 Exchange Rules
1031 Exchange Rules
1031 Exchange rules require a real estate investors to identify potential replacement
commercial real estate within 45 days of the close of escrow and acquire the replacement
commercial real estate (or
commercial real estate ) within 180 days of close of the relinquished commercial real estate. Furthermore, when choosing a replacement 1031 exchange
commercial real estate for the 1031 exchange, the
real estate investor must follow one of the following 1031 exchange rules:
The Three-Commercial Real Estate Rule - Any three commercial real estate regardless of their market values may be identified by the exchanger as potential replacement commercial real estate for the like kind exchange, however no more than 3 commercial real estate may qualify.
The 200% Rule - States that, in the event that three or more replacement commercial real estate are used, their total market value must not exceed 200% of the value of the commercial real estate that is being relinquished.
The 95% Exception - Finally, in the case that rules 1 and 2 do not apply, the aggregate value of the like kind commercial real estate must account for at least 95% of the value of the commercial real estate being sold in order for the exchange to qualify.
Contact us for more questions regarding 1031 exchanges and tenants in common exchanges and we will put you in contact with a specialist in your area.