1031 Exchange Rules
1031 Exchange Rules
1031 Exchanges require an acquisition period of 180 days, during which the
owner must identify potential
properties for the exchange (within 45 days) and acquire said
property or properties. The acquisition period begins at the close of escrow on the relinquished property. Furthermore, all
1031 exchanges must adhere to one of the following rules:
The Three-Property Rule states that the exchanger must identify up to, but no more than three potential properties during the acquisition period.
The 200% Rule - Stipulates that the aggregate value of all replacement properties in the exchange must not exceed 200% of the value of the relinquished property at the time of sale.
The 95% Exception - Finally, the 95% rule stipulates that the aggregate value of all like kind replacement properties must account for at least 95% of the value of the relinquished property at the time of sale in order for the exchange to qualify. This rule applies only if rules 1 and 2 are invalid.
Contact us for a free consultation with a 1031 advisor.