DST 1031 headquarters
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

Rental Income

Land

Oil/Gas

Student Housing
A TYPICAL 1031 EXCHANGE HAS
THREE BASIC STEPS

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

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

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