1031 Exchange Rules
1031 Exchange Rules
1031 Exchange rules require a real estate investors to identify potential replacement
commercial real estate within 45 days of the close of escrow and acquire the replacement
commercial real estate (or
commercial real estate ) within 180 days of close of the relinquished commercial real estate. Furthermore, when choosing a replacement
1031 exchange commercial real estate for the 1031 exchange, the
real estate investor must follow one of the following
1031 exchange rules:
The Three-Commercial Real Estate Rule - Any three commercial real estate regardless of their market values may be identified by the exchanger as potential replacement commercial real estate for the like kind exchange, however no more than 3 commercial real estate may qualify.
The 200% Rule - States that, in the even that three or more like kind commercial real estate are selected in the transaction, their aggregate value must not exceed 200% of the value of the commercial real estate that is being relinquished.
The 95% Exception - Stipulates that the aggregate value of any and all like kind replacement commercial real estate must account for at least 95% of the value of the relinquished commercial real estate in order for the exchange to qualify. This rule will apply only if rules 1 and 2 do not apply to the specific situation.
Contact us for a free consultation with a 1031 advisor regarding all upcoming 1031 tenants in common exchange opportunities.