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  • Common questions

    It often helps to review rules and concepts before you begin

  • What properties qualify for a 1031 exchange?

    Any property held for investment or business purposes. All such properties are considered “like-kind” and are eligible.

  • How do I determine my basis and gain in my sale?

    (Basis = initial property purchase price + cost of improvements — accumulated depreciation) Your capital gain matches the difference between net sales price and basis.

  • How do I fully defer my tax obligation?

    By following two rules:(1) Make sure your replacement property(ies) have an equal or greater net sales price.(2) Transfer all of your net equity into the new property(ies) as a down payment.

  • Can I purchase more than one property?

    Yes! Make sure that you properly identify each. And make sure you mind the timing and value requirements. (Note: it is often more difficult to buy 4+ properties)

  • What happens to my money? How do I know it is secure?

    We do not hold your sale proceeds; rather, we partner with FDIC-insured banks who will open an individual escrow account for you. The account is set up in your name and no 1031 funds may move in or out of the escrow account without your written and verbal authorization.

  • What happens if I change my mind? Can I cancel the exchange?

    Yes, you may cancel. You are not charged a fee unless you close on your relinquished property as part of a 1031 exchange. No upfront costs. Once your sale closes, the fee is non-refundable. The IRS imposes no penalties for failing a 1031.

  • What is "Boot"?

    “Boot” refers to the receipt of taxable assets in violation of IRS rules. You have "boot" if you (A) fail to put all of your net sale proceeds into the 1031 exchange, or (B) fail to purchase enough replacement property.

  • What is a "reverse" exchange?

    A "reverse" exchange allows you to capture your target property before closing on your sale property. This is useful in hot markets (or if your sale contract falls through). These are much more complicated than traditional 1031 exchanges.

  • How can I use some of my funds to improve/build my replacement property?

    Directly, you cannot do this. Indirectly, this is possible through a "construction" 1031 exchange. Like "reverse" exchanges, these are much more complicated than traditional 1031s. Don't worry, though! 1031X specializes in complex exchanges.

  • How do I figure out my potential tax obligation if I forego an exchange?

    We strongly recommend that you speak with an experienced CPA or tax preparer. Tax obligation depends on many factors. Use the fields below to arrive at an approximate number.

  • Do I need a CPA or Tax Advisor?

    We strongly recommend that you speak with an experienced CPA or tax preparer. This is not technically required, but please do. 1031X cannot act as your tax advisor or tax preparer.

  • What if I am selling or buying a property under a land contract?

    Generally, a Land Contract, Contract for Deed and/or a Contract for Sale mean the same thing. But not always! Speak with us (or your attorney) if you are confused about your agreement. Sometimes, a Land Contract must be structured like an installment sale - in this case, a 1031 is still possible but more difficult.

  • How can I do an exchange if the property I am selling is owned by a multi-member entity, but I am the only one interested in doing an exchange?

    You cannot change taxpayers in the middle of an exchange. Either the entire entity must perform the exchange, or you must leave the entity with title to your share of the underlying real estate (a "drop n' swap" exchange structure) prior to the sale. Please speak with us before attempting this.

  • Can I sell in one state and purchase in another?

    Yes! You may reinvest in all 50 states, plus Washington D.C., Guam, the Virgin Islands, and the Northern Mariana Islands. Some states will make this slightly more difficult than others. Your 1031X exchange officer will guide you.

  • Can I sell or purchase property from a related party?

    You may always sell to a related party to start your 1031. However, buying from a related party can be tricky. Please speak with us before attempting this.

  • Can I sell as a married couple, then purchase as a single entity?

    Tricky issue! If you own the current property together, the IRS allows you to take title together though a limited liability company that is a disregarded entity (owned solely by a spouses in a community property state, provided that you file taxes jointly) under Rev. Proc. 2002-69. If you live in a non-community property state, your only option is to reinvest as individuals or to form two separate single member LLCs.

  • What are exchangeable and non-exchangeable expenses?

    There are no definitive lists about which expenses are "exchangeable". The best rule of thumb? If the expense only arises coincident with a real estate transaction (e.g. commissions or title fees), they are exchangeable. If the expense would incur eventually even without a transaction (e.g. taxes or rents), they are not exchangeable.

  • Do I need language in my contract regarding my intention to do a 1031 exchange?

    No, although this is very common. You are required to notify your counterparty about your intention to perform a 1031, but 1031X will take care of that requirement for you. Don't worry about it.

  • Do I need to have a contract or can I sell/buy on a "handshake deal"?

    You must have an enforceable and assignable legal agreement to sell/buy.

  • When and how do I pay?

    You do not pay us directly. Rather, our exchange fee is taken from your sale proceeds at closing.

  • When do I need to get the Intermediary involved?

    Informally? As early as you have questions. Formally? Once you are under contract to sell your relinquished property.

  • Can I use the proceeds from my sale to pay down debt on other properties I own?

    Yes, but any proceeds used in this manner will be taxable. To defer all of your taxes, you must use your proceeds as down payment on valid replacement property.

  • Can I sell multiple properties and buy one?

    Yes! Any combination that you can think of. We're happy to structure this for you.

  • What if I already closed on my sale/purchase property?

    It is almost certainly too late to begin an exchange. We recommend that you investigate Opportunity Zone investments at this stage. Please speak with us if you are unsure.

  • Can I enter into a contract to purchase before selling my sale property?

    Yes! Just make sure that you close on your sale property first, then close on your purchase (otherwise you may need a "reverse" 1031 exchange). All-in-all, your 1031 will be much easier if you are already under contract on your new property.

  • How do I handle earnest money deposits on my sale/purchase property?

    You can receive and even hold earnest money deposits in anticipation of a 1031 sale. However, such funds will be considered "sale proceeds" and must be escrowed with your 1031 intermediary after closing. For replacement properties, you may either put the earnest money down yourself or fund earnest money from your 1031 escrow account.

  • No Problem!

    We'll gather your contact information here. An Exchange Officer will contact you very soon.

  • Tell us about yourself

    Filing jointly with spouse? We'll need your spouse's information too

  • Representative information

    Let us know if you would like anyone else copied throughout your exchange

  • Be aware that the IRS regulations will require a more specialized structure for your 1031 Exchange.

    These are referred to as "Reverse" or "Improvement" exchanges and we will cover these as we go.

  • Tell us about the relinquished property

    The property you plan to sell

  • An undivided% interest in:

  • 100% membership interest in which owns real property described as:

  • shares in DST which owns property located at:

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  • an Oil, Gas, or Mineral interest, described as:

  • This is a fill in the field. Please add appropriate fields and text.

  • - -
    Pick a Date
  • - -
    Pick a Date

  • No worries, just let us know when closing has been scheduled.

  • Don't worry! We can get that information later.

  • Browse Files
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    Choose a file
    Cancel of
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    Cancel of

  • No problem!

    We'll reach out to your closing agent for a copy
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  • Don't worry!

    We'll reach out to your closing agent for a copy

  • Hey, no worries

    You have up to 45 calendar days after your sale closing to arrive at a concise list of potential replacements.

  • Tell us about the replacement property

    The property you plan to buy. (Buying multiple properties? You'll be able to add more later)

  • An undivided% interest in:

  • 100% membership interest in which owns property described as:

  • shares in DST which owns property located at:

  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of

  • This is a fill in the field. Please add appropriate fields and text.

  • This is a fill in the field. Please add appropriate fields and text.

  • - -
    Pick a Date
  • - -
    Pick a Date

  • No worries, just let us know when closing has been scheduled.

  • Don't worry! We can get that information later.

  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of
  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of

  • No problem!

    We'll reach out to your closing agent for a copy
  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of
  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of

  • Don't worry!

    We'll reach out to your closing agent for a copy

  • Tell us about the next replacement property

    The 2nd property you plan to purchase

  • An undivided% interest in:

  • 100% membership interest in which owns property described as:

  • shares in DST which owns property located at:

  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of

  • an Oil, Gas, or Mineral interest, described as:

  • This is a fill in the field. Please add appropriate fields and text.

  • - -
    Pick a Date
  • - -
    Pick a Date

  • No worries, just let us know when closing has been scheduled.

  • Don't worry! We can get that information later.

  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of
  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of

  • No problem!

    We'll reach out to your closing agent for a copy
  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of
  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of

  • Don't worry!

    We'll reach out to your closing agent for a copy

  • Tell us about the replacement property

    The 3rd property you plan to purchase

  • An undivided% interest in:

  • 100% membership interest in which owns property described as:

  • shares in DST which owns property located at:

  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of

  • an Oil, Gas, or Mineral interest, described as:

  • This is a fill in the field. Please add appropriate fields and text.

  • - -
    Pick a Date
  • - -
    Pick a Date

  • No worries, just let us know when closing has been scheduled.

  • Don't worry! We can get that information later.

  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of
  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of

  • No problem!

    We'll reach out to your closing agent for a copy
  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of
  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of

  • Don't worry!

    We'll reach out to your closing agent for a copy

  • Tell us about the replacement property

    The 4th property you plan to purchase

  • An undivided% interest in:

  • 100% membership interest in which owns property described as:

  • shares in DST which owns property located at:

  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of

  • an Oil, Gas, or Mineral interest, described as:

  • This is a fill in the field. Please add appropriate fields and text.

  • - -
    Pick a Date
  • - -
    Pick a Date

  • No worries, just let us know when closing has been scheduled.

  • Don't worry! We can get that information later.

  • Browse Files
    Drag and drop files here
    Choose a file
    Cancel of