Forward 1031 Exchange
Do you want to take your real estate investment strategy to the next level? The next time you place a property on the market for sale, consider performing a 1031 exchange. This strategy allows you to defer federal and state capital gains tax* and recaptured depreciation — which means that you get more purchasing power and flexibility.
The most common type of exchange — a “forward” 1031 exchange (also known as a “traditional” or “delayed” 1031 exchange) — is also the most simple method.
How does a forward 1031 exchange work?
A 1031 exchange is based on tax code 26 U.S. Code § 1031 - Exchange of real property held for productive use or investment. In short, it allows you to trade one property for another without recognizing taxes. By classifying your sale as an “exchange", the profits from your property sale are not treated by the IRS as capital gains or recaptured depreciation.
Taxes are often the single biggest expense when you sell a property. When you're trying to make the most of your future investments, taxes can hold you back by significantly reducing the amount of capital you have left to re-deploy.
Why choose 1031X as your qualified intermediary?
At 1031X, we provide 1031 forward exchange services to investors nationwide. We'll help you intelligently navigate changes to your real estate portfolio and keep Uncle Sam at bay. We will make your exchange process seamless, easy, and transparent. Some of our benefits include:
Automation
We automate the forward exchange process as much as possible to make it as easy as possible for clients. Automation reduces confusion, clerical errors, and time delays.
Connections with brokers, agents, and more
With 30 years of experience in the industry, 1031X has developed connections with various brokers, accountants, advisors, deal sponsors and other real estate-adjacent companies. We can get you in touch with the right people if you need extra support.
Identify replacement properties instantly
With a few clicks on your phone, you can identify replacement properties and real estate (or remove/edit them).
One-on-one service
You'll have a dedicated exchange officer and support team. Whenever you have questions, you can reach your officer directly. They will ensure you receive individualized attention and fast responses.
Flat rates
1031X provides a flat-rate fee for all exchange services with unlimited free consultations and custom solutions — and we don't charge any wiring fees.
The rules of a 1031 exchange
The IRS imposes many (often unintuitive) rules for successfully completing a 1031 forward exchange. Each rule acts a potential tripwire for investors, so it is essential to keep these rules in mind:
- You must exchange into a property or properties that are of equal or greater value.
- The properties involved must be like-kind to each other. The IRS’s rules on what justifies as like-kind are fairly broad.
- Your replacement property or properties must be identified within 45 days after your sale.
- Your replacement property or properties must be purchased within 180 days of your sale.
- You must work with a qualified intermediary (QI) on a delayed exchange.
The role of a qualified intermediary
The tax code says you need one, but what do they do? Technically speaking, they create the appropriate legal distance necessary to keep you from recognizing income on your sale. For example, a qualified intermediary like 1031X holds the money from your property sale and passes it to the seller of your exchange property. Functionally speaking, the qualified intermediary does much, much more. It's essential to have a reputable one who you can trust to safeguard your proceeds and who makes the process much easier.
With the help of a QI like 1031X, you can:
- Access larger real estate investments, faster
- Control how and when you face taxes
- Flexibly switch between asset types
- Avoid common mistakes
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