Key 1031 Exchange Rules
1
Like-Kind Property: The replacement property must be of "like-kind" — generally any real property held for investment or business use qualifies.
2
45-Day Identification Rule: You must identify potential replacement properties in writing within 45 calendar days of selling your property. No extensions.
3
Three-Property Rule: You may identify up to 3 properties regardless of value, OR any number if total value does not exceed 200% of the relinquished property.
4
180-Day Closing Rule: You must close on the replacement property within 180 calendar days of selling your property (or your tax return due date, whichever is earlier).
5
Qualified Intermediary Required: Proceeds must be held by a qualified intermediary (QI). You cannot touch the funds at any point during the exchange.
6
Equal or Greater Value: To defer all capital gains, the replacement property must be of equal or greater value, and you must reinvest all net proceeds.
7
Same Taxpayer: The same taxpayer who sells the relinquished property must acquire the replacement property. Title must match.