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1031 Exchange Services

Are you ready to elevate your real estate investment strategy? With a 1031 exchange, you can defer federal capital gains tax for greater purchasing power on your replacement property. At 1031x.com, Inc. (“1031X”), we offer numerous exchange options to provide greater flexibility.

As with all exchange companies, by regulation, we serve as the Qualified Intermediary (QI) to help administer, process, facilitate, and coordinate your exchange. 1031 exchange transactions are complex tax-deferred strategies. You should always seek the advice of your legal, financial, and tax counsel before entering into any exchange transaction. 1031X is available to work with you and your advisors in planning your 1031 exchange, but 1031X is serving solely in the role of the Qualified Intermediary. We are not providing legal, tax, or financial advice.

When do you need to use a 1031 exchange?

Put simply, a 1031 exchange is when you swap one investment property for another. You can do this to change the form of your investment or gain a greater profit. While there is no limit to the number of times you can swap investment properties, there are certain situations when it may become more complicated and require the help of a Qualified Intermediary like 1031X.

IRS regulations and how they affect the 1031 exchange process

Based on IRS regulations, there are two exchange timelines to be aware of. The odds of finding someone who wants to swap a property of the same value with you is generally slim, so most 1031 exchanges become delayed exchanges. This means you need a QI to hold the cash for you after selling your property, and use the money to purchase your new replacement property.

The first rule is the 45-day rule. Once the sale of the property occurs, you have 45 days to designate what will be your replacement property in writing to your QI. The second rule is you must close on your new property within 180 days of the sale of your new property.

These two regulations operate at the same time, which means if you wait the full 45 days to designate a replacement property, you have 135 days left to close on it.

Common situations for a 1031 exchange

A 1031 exchange can be a helpful tool in various real estate transactions. Here are a few common situations where a 1031 exchange may be beneficial and how 1031X can help.

You plan on buying a property first before selling

This is the most common use of a 1031 exchange and often the easiest to navigate. This type of exchange is a forward 1031 exchange, also simply called a forward exchange. The IRS mandates that a QI like 1031X be present during all forward exchanges. Forward exchanges serve as the basis for all exchanges. If you wish to perform this exchange with 1031X, our fee for forward exchange services is $950.

You need to acquire the property before you can sell

This type of exchange builds on a forward exchange and is slightly more complicated. Since this type of exchange is the opposite of a forward exchange, it's known as a reverse exchange.

The IRS requires you to sell your property before buying a replacement property. By partnering with 1031X, we will act as a “strawman” — we purchase the property on your behalf and hold it until you can sell the property you currently own. To receive our 1031 reverse exchange services, the fee is $5,500.

Replacement property compliance and review notes
men in business suits shaking on a deal

You need the funds from the sale to improve a property you plan to purchase

This type of exchange is a construction exchange and is similar to a reverse exchange. According to the IRS, once you purchase a property, any improvements made will not count, and you will not experience any tax benefits from using the funds of the sale to make these improvements.

Much like in a reverse structure, the 1031X team will acquire and hold the property (through a process approved by the IRS) during the construction and improvement process. Once these renovations are complete, we will transfer the property into your name. Our 1031 construction exchange services cost $6,500.

What is the process to complete a 1031 exchange?

To enjoy the benefits of a tax deferral through a 1031 exchange, you will need to complete the following steps:

  1. Reach out to the 1031X team: We will be your Qualified Intermediary and discuss options to create a personalized exchange experience, without giving you the runaround.
  2. Sign exchange documents: Once you give our team permission to begin the exchange, you will receive electronic agreements to set up your individual Qualified Escrow Account and the exchange.
  3. Close on your relinquished sale: After filing the correct paperwork, the sale proceeds will enter escrow with one of our partner deposit institutions (a well-known, FDIC-insured bank or financial institution).
  4. Identify replacement properties: According to internal revenue codes, you must identify your replacement property — or properties, if you select more than one — within 45 days of the sale closure. You can complete this with our online portal.
  5. Enter a contract to buy replacements: After executing your sale and sale agreement with your Exchange Officer, you will enter an Assignment of Contract.
  6. Close your replacement sale: You must close your property transaction within 180 days of the sale of the first property (if a forward exchange), or 180 days after buying (if a reverse exchange).

Important information about our services as a Qualified Intermediary

1031 exchange transactions are complex tax-deferred strategies. You should always seek the advice of your legal, financial, and tax counsel before entering into any exchange transaction. 1031x.com, Inc. (“1031X” and dba as "1031X") is available to work with you and your advisors in planning your 1031 exchange, but 1031X is serving solely in the role of the Qualified Intermediary (QI). We are not providing legal, tax, or financial advice. We are facilitating, coordinating, and administering the process of the exchange in the specific and isolated role of a QI. Always consult your own separate legal, financial, and tax counsel.

You are specifically agreeing to do so in our Agreement to be your QI, and you are agreeing not to interpret any discussions or other interactions with 1031X, or any of their employees or representatives, as legal, tax, or financial advice. That is the role of your legal, financial, and tax advisors. We look forward to serving you in the capacity of your Qualified Intermediary.

Benefits of working with 1031X

When you choose 1031X, we provide you with almost 30 years of experience and knowledge from processing several billion dollars worth of 1031 exchanges. We have a dedicated team of specialists in all aspects of 1031 exchanges located around the country. Work with us as your QI, and experience benefits such as:

  • A greater sense of security: We deposit clients’ exchange proceeds in separate Qualified Escrow Accounts at FDIC-insured banking institutions. We also utilize industry-accepted security features to further protect against threats.
  • Personalized attention: You will have access to an Exchange Officer and enjoy customized attention to help you stay on track.
  • Decades of experience: We have decades of experience completing 1031 exchanges and many connections with real estate professionals who can aid in your exchange’s success.
  • Paperless automation: To streamline paperwork, we offer paperless automation and access to our client portal. Sign documents, chat with our team, and locate properties.
  • Customized exchange process: No exchanges are too complex for 1031X. Our team will work with you to personalize the exchange process to best fit your needs. No funny business here.

Contact us to start the 1031 exchange process today

At 1031X, we offer resources and expertise to help achieve your 1031 exchange goals. Whether you wish to perform a forward, reverse, or construction exchange, we strive to help make the process as easy as possible. Take the first step today by calling 888-899-1031 or complete our online contact form for a free consultation.