An Exceptional Exchange Experience, Made Easy. |
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Paper or Digital, the Calendar Is Your Friend
The IRS is Strict on Timing Deadlines
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The saying says, “Time waits for no one,” and the IRS takes it seriously when approving a 1031 exchange. Strict timing requirements are explicit in the tax code for Section 1031 like-kind exchanges. Three events are primary considerations for your 1031 success:
- A 1031 exchange must be initiated with the Qualified Intermediary (QI) before the first property closes. 1031 CORP. serves as the QI.
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Exchangers must identify replacement properties by midnight of the 45th day.
- An exchange must be completed by the 180-day deadline, closed on all replacement properties.
All three of these timing requirements must be met or an exchange will fail.
Most importantly, and as many potential first-time exchangers lament, the exchange must be initiated before closing on either the relinquished property, or in the case of reverse exchanges, the first replacement property. While the 1031 CORP. Exchange Team recommends an exchanger is at an advantage with plenty of lead time, a call to 1031 CORP. from the closing table is an acceptable start. Without this action, an exchange cannot proceed.
On the 45th day after closing on the relinquished property, the exchanger must identify potential replacement properties to the QI. The law allows an exchanger to purchase only these identified properties—closing on one or any of those properties identified. While not required, 1031 CORP. Exchange Team members recommend you get the replacement property under contract during the 45-Day Exchange Period, especially if the market is tight.
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The IRS imposes strict requirements on the timing of a 1031 exchange. Start with a call to a QI before closing, identify properties by 45 days, and complete an exchange within 180 days. |
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1031 Exchanges Made Easy
Thursday, May 4, 2023
12:00 PM Eastern
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1031 CORP. provides an easy-to-follow overview of 1031 tax-deferred exchanges and their many benefits. We'll also review the requirements of a successful exchange and the essential role of 1031 CORP. to keep the exchange transaction simple for all parties and wrap up with questions and answers. |
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Reducing Friction for Affordable Housing |
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The Section 1031 like-kind exchange provision fills gaps that other tax policies do not and provides incentives for landlords to sell and hold rental properties that support quality, attainable housing. |
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Buyers Can Use 1031 to Help Their Neighbors
The National Multifamily Housing Council reports that, in the U.S., undersupply of housing has led to a decline of 4.7 million affordable apartments between 2015-2020. The competition for that attainable rental housing has increased the share of cost-burdened American households paying more than 30 percent of their income for housing to nearly 37 percent in 2021. As an option for residential investment property owners at all economic levels, the benefits of 1031 exchanges extend beyond tax deferral and wealth creation for landlords to a natural incentive to preserve, develop, and build quality and attainable housing for the community good.
Liquidity in rental housing can positively affect the quality of housing and the ability to transfer ownership for a property’s best use. If a landlord cannot keep up with the maintenance on a property and wants to exit from the investment, a sale is inevitable, or the property owner simply chooses to move into another investment, Section 1031 provides an incentive to sell because of the tax deferral and the ability to shift the owners’ investments. This vulnerable property then becomes available to other new buyers, who are more likely to improve or renovate a property with greater investment, creating better quality housing for renters. And, these improvements benefit adjacent property and the surrounding community.
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Schedule a 1031 Presentation |
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The 1031 CORP. Exchange Team is available to present seminars, webinars and continuing education courses on 1031 exchanges, their many benefits and the requirements of a successful exchange to your association or groups.
Our team will tailor the presentation to your audience and time schedule.
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Christine Mesaros
1031 CORP.
Banking Manager
(610) 792-4880
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Christine Mesaros
Role: Banking Manager
Location: Collegeville, Pennsylvania
What impresses you about 1031 exchanges?
1031 exchanges build wealth at every financial level—it’s not just for the wealthy. Average Joes use it, like Mom & Pop landlords with small rentals, small business owners, even Amish farmers and businesses. It helps people build up their investments over time.
The security of client funds is a critical function of a QI. What should an exchanger look for when choosing a QI?
Cybercriminals are relentless—we see numerous threats every day, which makes security so important. Look for segregated exchange accounts, a reputable bank, and account options that ensure FDIC coverage. Verification procedures that prevent cybercriminals from using social engineering tactics are good precautions - technology like DocuSign, and strong cybersecurity are examples. Transparency, such as the ability to view accounts, is also a factor.
Questions about safety should go farther, too. Exchangers should ask about the security of their personally identifiable information and other client protections, such as a Fidelity Bond or Errors and Omissions (E & O) insurance.
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How do 1031 exchanges relate to you? |
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Please select only one answer. Your answer will help us develop future content.
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I am interested in learning about 1031 exchanges for myself.
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I am an existing client of 1031 CORP.
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I am an attorney for my exchange clients.
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I am a CPA for my exchange clients.
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I am a real estate professional for my exchange clients.
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I am a title or escrow agent.
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I have another type of relationship to 1031 exchanges and 1031 CORP.
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Serving as a nationwide Qualified Intermediary for 1031 tax-deferred exchanges since 1991, 1031 CORP. strives to provide an exceptional exchange experience for our clients and their advisors. We provide our clients with enhanced security of funds, knowledgeable exchange professionals and a commitment to keep the exchange process simple for our clients and their advisors. Our Exchange Team, which includes Certified Exchange Specialists®, has the experience and expertise to facilitate even the most complex exchange transactions, including reverse and improvement exchanges.
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