1031-IRS-EXCHANGE.COM
1031-IRS-EXCHANGE.


Irs 1031 Exchange Rules

IRS internal revenue code stipulates that exchangers must identify potential replacement investment real estate withing 45 days of the close of escrow and acquire said investment real estate (or investment real estate ) withing 180 days of the closing of the relinquished investment real estate. Furthermore, real estate investors must comply with one of the following rules:

  • The Three-Investment Real Estate Rule - Seller must identify up to a total of three potential replacement investment real estate within the Acquisition Period.

  • The Two Hundred Percent Rule - The second rule holds that in the event that three or more investment real estate are identified, the market value of all investment real estate combined may not exceed 200% of the value of the investment real estate, which was sold.

  • The Ninety-five Percent Exception - This third rule is set in place in the event that the other rules do not apply. The exchange will still qualify as an IRS 1031 exchange only if the replacement investment real estate acquired represent at least 95% of the aggregate value of investment real estate identified.

    Many real estate investors have benefited from engaging in TIC investment real estate investments because they qualify under the mentioned rules and can be completed in a timely manner.

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