Our 1031 Exchange Services

An overview of the various 1031 Exchange Types we offer.

Simultaneous

Occasionally, the sale of the old property and the acquisition of the new property close in one extended closing. This is called a simultaneous 1031 exchange. Prior to the 1980s, all 1031 exchanges were simultaneous. The majority of 1031 exchanges today are closings delayed by hours or a couple of days. This is fine because the purchase has up 180 calendar days to close. It is suggested that if the closings are with different title companies or attorneys and at least one day is allowed for the transfer of 1031 exchange funds. The wire transfer occurs typically within fifteen minutes of being initiated.

Learn More

Deferred / Delayed

A delayed 1031 exchange is when the old or relinquished property is sold and closed before the replacement or new property is purchased and closed. For example, a taxpayer enters into a contract or agreement to sell real property held for use in business or investment. The property closes, paying off associated debt, and the remaining net proceeds are wired to escrow under the taxpayer’s tax identification number. Once the replacement property is in contract for an equal or greater amount, a second closing is scheduled, net proceeds are wired and the delayed 1031 exchange is completed.

Learn More

Reverse

A reverse 1031 exchange represents a tax deferment strategy when, for a variety of reasons, the replacement property must be purchased before the relinquished or old property is sold. It is more complex than a forward 1031 exchange and requires careful planning. These types of exchanges require the establishment of an Exchange Accommodator Titleholder (EAT) as the Exchanger cannot have possession of both properties at once. Apart from these few key differences, they follow the standard Delayed Exchange rules.

Reverse

Construction / Improvement

A build to suit 1031 exchange, a type of a 1031 construction exchange, is used to make improvements to the replacement property. An example of a 1031 construction exchange is the sale of the commercial property that is then replaced with another improved commercial building. Proceeds from the sale of the old property go towards the build out. A construction or a build to suit exchange implies that the replacement property is acquired prior to or after the old property is closed. Improvements to the new property are made with title conveyed to the taxpayer either on or before the 180th calendar day post initial closing. As long as the value of the improvements plus the cost of the replacement property is equal to or greater than the old property, the construction exchange allows taxpayers to defer the capital gains tax and recaptured depreciation triggered when the old or relinquished property was closed.

Learn More