DST1031HQ | What is a 1031? | 1031 Exchange Rules

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What are the Typical 1031 Exchange Rules?

A typical 1031 Like-Kind Exchange allows an investor or business owner to sell an investment property and replace it with another property (passive or active ownership) of equal or greater value within a timeframe of 180 days from the date of close using a qualified intermediary. If all the criteria are met the investor can defer taxes on up to 100% of capital gains created from the sale of the original property. Some form of 1031 Like-Kind exchanges has been around since 1921.

LIKE-KIND PROPERTY

Commercial

Industrial

Retail Center

Healthcare

Multi-Family

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Rental Income

Land

Oil/Gas

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Student Housing

A TYPICAL 1031 EXCHANGE HAS

THREE BASIC STEPS

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Exchanger sells the property, known as the relinquished property, and proceeds are escrowed with a Qualified Intermediary (QI).

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Qualified Intermediary, Through a written agreement with the investor, transfers funds for the purchase of replacement property

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Exchanger receives new property (or DST interest)

TIMELINE FOR 1031 EXCHANGE

Replacement property(ies) must be closed within 180 days of the closing date of the relinquished property.

Exchanger has 45 days to identify

replacement property(ies).

Day 0

Day 45

Day 180

POTENTIAL BENEFITS OF 1031 EXCHANGE

Defers capital gains tax
Preserves capital
Opportunity to diversity portfolio
Faciliates estate planning

Contact for More Info

* DST1031HQ does not provide tax, legal or accounting advice, nor can we make any representations or warranties regarding the tax consequences of your exchange transaction. We strongly encourage you to seek appropriate professional advice regarding your specific facts and circumstances. This is for informational purposes only and does not constitute an offer to purchase or sell scrutinized real estate investments. Such offers are only made through the Sponsors Private Placement Memorandum (PPM) which is solely available to accredited investors and accredited entities. There are risks associated with investing in real estate and Delaware Statutory Trust (DST) properties including, but not limited to, loss of entire investment principal, declining market values, tenant vacancies, and illiquidity. Investors should read the PPM carefully before investing paying special attention to the risk section.