Specific 1031 Exchange Risk

1031 Exchanges are highly complex and failure to comply with the stringent requirements may result in a complete loss of the desired tax deferral.

Investors should carefully consult with independent tax and legal counsel prior to initiating, and while performing, a tax-deferred exchange.

There are numerous section 1031 rules and requirements including but not limited to: seller cannot receive or control the net sales proceeds, replacement property must be like-kind to the relinquished property, the original replacement property must be identified within 45 days from the sale of the property, the replacement property must be acquired within 180 days from the sale of the original property, and the debt placed or assumed on the replacement property must be equal or greater than the debt encumbering the relinquished property.