Section 1031 exchanges let real estate investors defer capital gains taxes by exchanging into like-kind property. Miss a deadline or a technical requirement and the deferral is gone, so plan the exchange before the sale closes.
Key Requirements
- 45-day identification period for replacement property
- 180-day exchange completion deadline
- Like-kind property definition (real property for real property)
- Qualified intermediary requirements
Advanced Strategies
Reverse exchanges, improvement exchanges and Delaware Statutory Trusts give more room in complicated situations. Bring in experienced exchange counsel early.