1031 exchange allows the investor to
get the maximum gain from the 1031 exchange
properties. However, the exchange process is quite difficult, and it would
be useful for the investor if he takes guidance from expert professionals. We
have extensively experienced team in handling a highly profitable exchange of
property for our diverse client base.
The properties that are involved in the
1031 exchange are office buildings, storage facilities, industrial properties,
single-family homes, multi-family apartments, raw lands, retail shopping
centers, and triple net leases.
There are certain pre-requirements for
acquiring and identifying potential like-kind property or 1031 replacement
properties in your 1031 exchange. Replacement property that you want to
purchase for 1031 exchange should be determined to your Accommodator and must
be identified within the 45th day of the calendar following the end of your
relinquished property sale transition.
Let’s
discuss an example to explain this:
If the sale of the property of the
investor closes on August 31, then the first day of 45 day calendar
identification period would be September 1, and the 45th calendar day would be
October 15. For this, an investor must follow at least one of the following
identification rules when completing the identification of like-kind
replacement properties.
One more requirement for completing a
1031 exchange is that the investor must involve qualified intermediaries. So,
if the investor is thinking to achieve the 1031 Exchange by himself, then he
should stop bothering because the chances are negligible. We can say this is a
miracle after all more experienced and qualified personnel will be handling
your exchange.
Qualified Intermediaries are the
person who is responsible for the exchange. Without the involvement of
Qualified Intermediary, also known as QI, an investor cannot complete1031
exchange. If the investor wants to complete the 1031 Exchange by himself, then
it is not possible, as Qualified Intermediary is the heart of the 1031 exchange,
and we can't imagine an exchange without them.
The exchange process starts with the sale of the relinquished
property. For this purpose, the investors require the help of Qualified
Intermediary as he owns the proceeds in an appropriate type of account
known as Escrow account because the investors are not permitted to touch the
proceeds. As we already know, there is a deadline of 45 days for the
identification of the replacement property. These 45 days is known as the
identification period. Suppose if the investor does not meet either the
deadline and couldn’t complete the exchange within 180 days, then the property
exchange will not be listed for 1031 exchange. Since time plays an important
role, and the involvement of Qualified Intermediary becomes a more important
part of 1031 exchange properties.
