1031 Like Kind Exchange Rules
1031 Like Kind Exchange Rules
1031 Like Kind Exchange rules require a property investors to identify potential replacement
income properties within 45 days of the close of escrow and acquire the replacement
income property (or
income properties ) within 180 days of close of the relinquished income property. Furthermore, when choosing a replacement
1031 like kind exchange income property for the 1031 like kind exchange, the
property investor must follow one of the following
1031 like kind exchange rules:
The Three-Income Property Rule - Any three income properties regardless of their market values may be identified by the exchanger as potential replacement income properties for the like kind exchange, however no more than 3 income properties may qualify.
The 200% Rule - Stipulates that the aggregate value of all replacement income properties in the exchange must not exceed 200% of the value of the relinquished income property at the time of sale.
The 95% Exception - Finally, the 95% rule stipulates that the aggregate value of all like kind replacement income properties must account for at least 95% of the value of the relinquished income property at the time of sale in order for the exchange to qualify. This rule applies only if rules 1 and 2 are invalid.
Contact us for a free consultation with a 1031 like kind expert.