Everything you need to exchange with confidence

The Complete Guide to a 1031 Exchange

The 45-Day and 180-Day Deadlines Explained

1031 Exchange in California

DST vs. REIT: Which Is Right for Your 1031?

What Is a Delaware Statutory Trust (DST)?

721 Exchange / UPREIT: Trade Real Estate for REIT Shares

The Market Rent Is 2,400 Dollars. The Ordinance Says You May Never Get There

A pro forma showing units marked to market assumes you are allowed to mark them to market. In a growing number of cities, that assumption needs checking before you identify.

Buying at Auction With Exchange Money: Winning the Bid Is the Easy Part

Fast closings and motivated pricing make auctions look tailor made for an exchanger against a clock. Then the deposit rules, the deed timing and the intermediary all have to line up.

You Underwrote the Seller's Tax Bill. Yours Is Going to Be Different

A 1031 exchange defers income tax on your gain. It does nothing about the property tax bill, which in many places resets to your purchase price the moment you buy.

There Is a Cell Tower on the Roof. The Income May Not Come With the Building

Carrier equipment and solar arrays look like revenue attached to the property. Sometimes the previous owner sold that revenue stream years ago, and the buyer never asks.

The Rent Still Arrives on the First. The Store Has Been Closed for a Year

A credit tenant can stop operating and keep paying, entirely within its rights. The cheques do not miss a beat while the value of the building quietly falls.

The Rent Roll Is the Seller's Opinion. The Estoppel Is the Tenant's

One is a spreadsheet someone made about their own building. The other is each tenant signing their version of the truth, and the two do not always agree.

He Exchanged Into Three Condos, Then Read the Governing Documents

Condominium units qualify as replacement property without difficulty. What the governing documents allow you to do with them is a separate question, and it is answered before you buy or not at all.

Giving the Building to Your Daughter Also Gives Her the Tax Bill

A lifetime gift hands over your basis along with the keys. Every dollar of gain deferred through years of exchanges travels with it, and the basis reset at death is lost.

You Exchanged Into Three States. You Now File Tax Returns in Three States

Diversifying geographically is sound investing. It also quietly signs you up for registrations, filings and in some cases franchise taxes you did not budget for.

You Identified a Building. You Closed on Most of One. Does That Still Count?

Deals change shape between day 45 and the closing table. A parcel gets carved off, a seller keeps a strip, a portfolio loses an asset. The question is whether what you bought is what you named.

Your Business Does Not Need to Own the Building It Operates In

Sell the property to an investor, sign a long lease, stay exactly where you are, and move the equity into income producing property through an exchange.

A 5 Percent Distribution Is Not a 5 Percent Return, and the Difference Is Your Own Money

Two offerings can quote the same number and mean very different things. One pays you from the building. The other partly pays you back with what you invested.

A Form Arrived Saying You Received 2.4 Million Dollars. Your Exchange Is Fine

Every January brings the same alarmed phone call about a 1099-S. It reports that a sale happened. It says nothing about whether the gain was deferred.

Your Exchange Funds Are Earning Interest. Ask Who Is Keeping It

Over a full 180 day exchange, the float on seven figures is real money. Whether it lands with you or with your intermediary is set by an agreement most people sign without reading.

Sometimes the Best Thing About a Replacement Property Is the Loan Already On It

A seller's existing mortgage at an old rate can be worth more than the building. Assuming it also solves the debt replacement problem without new underwriting.

Changed Your Mind on Day 31? You Can Still Redo the Whole List

Most owners treat the identification they sent on day 12 as carved in stone. It is not. Until midnight on day 45 you can revoke and replace it as often as you like.

Who Writes the Earnest Money Cheque? The Question That Quietly Creates Boot

A deposit you paid from your own account, handed back to you at closing, is not a refund. Handled carelessly it becomes a taxable distribution from the exchange.

You Inherited a Rental. You May Have Nothing Left to Defer

Heirs often ask how quickly they need to set up an exchange. The better question is whether they need one at all, because death may already have removed the gain.

Spreading the Gain Instead of Deferring It: The Installment Sale

An installment sale spreads a tax you will still pay. A 1031 exchange defers it. The trap is that ordinary depreciation recapture is generally due in full in the first year either way.

You Exchanged Into a Building Your Own Business Rents. The Income Just Changed Character.

Rent paid by a business you materially participate in is recharacterised as nonpassive, while losses stay passive. It quietly defeats a plan built on sheltering income.

Fire, Flood and the 45 Day Clock: When Property Is Damaged Mid Exchange

Three different problems hide inside one question. The replacement is damaged, the property you are selling is damaged, or a federal disaster declaration changes your deadlines.

Two Numbers That Decide Whether Your Rentals Work For You: 750 Hours and One Half

Real estate professional status turns rental losses nonpassive and can lift net rental income out of the 3.8 percent tax. Both tests must be met, and the records are what decide it.

What Do You Do With the Last 80,000 Dollars?

Buildings come in the sizes they come in, and your proceeds are a precise number. The gap between them is boot unless you plan for it before closing.

The Losses on Your Return That a 1031 Exchange Does Not Free

Suspended passive losses are released by a fully taxable disposition, and an exchange is the opposite of that. They carry forward instead, which is not always the wrong answer.

When Borrowing Makes the Deal Worse: Negative Leverage Under a 45 Day Clock

Replace the debt or recognise mortgage boot. The rules push exchangers toward borrowing without asking what the borrowing costs, and above a certain rate it reduces your return.

The Phase I That Comes Back on Day 38

Environmental liability is strict and runs with ownership. The defences available to a landowner require proper inquiry before you buy, which sits badly with a 45 day deadline.

The Gain You Could Not Defer: What to Do With 1031 Boot

Boot is recognised capital gain, and capital gain has more than one exit. A qualified opportunity fund can sometimes take the piece a 1031 exchange could not.

Selling the Farm: Sorting One Sale Into Four Tax Outcomes

A farm sale looks like one transaction and is taxed like four. The allocation between house, land, equipment and stored crop is negotiated in the contract and decides what can be exchanged.

What Your Heirs Actually Inherit When You Die Holding a DST

A basis reset at death can erase a lifetime of deferred gain and accumulated recapture. The harder questions are liquidity, the sponsor's timetable, and dividing something that cannot be sold.

The Settlement Statement Lines That Quietly Create a Tax Bill

Exchange funds can pay the costs of transferring a property. Pay the costs of operating or financing it and you have created boot, on a transaction you thought was fully deferred.

You Moved Out and Rented Your Old House. What Can You Still Exclude?

Renting your former home usually does not cost you the home sale exclusion straight away. The nonqualified use rule bites in the other direction, and the clock that matters is not the one people expect.

The Seven Things a DST Cannot Do, and the Escape Hatch That Costs You

Revenue Ruling 2004-86 keeps a Delaware Statutory Trust passive, which is exactly what makes your interest exchangeable. The springing LLC lifts those limits and changes what you hold.

Can You 1031 Into a Property Overseas? The Border Rule That Surprises People

US and foreign real property are not like kind to each other. Foreign to foreign exchanges are fully available, and a few US territories sit on the domestic side of the line.

Held for Investment, or Held for Sale? The Line That Decides Your Exchange

Section 1031 excludes property held primarily for sale. Dealer status attaches to properties rather than people, and it is judged after the fact by what you did.

When the Distributions Stop: What Happens if a DST Goes Wrong

Most material describes the good outcome. Distributions can be cut or suspended, values can fall, and investors have almost no levers. Knowing that beforehand is the point.

One Building, Two Tax Breaks: Splitting a Duplex Between Section 121 and a 1031

You live upstairs and rent downstairs. When you sell, the IRS is willing to treat that as two transactions, and each half gets different and genuinely useful treatment.

Who Holds the Deed While You Wait? Inside the Parking Arrangement

A reverse exchange works because someone else owns your new property for a while. The safe harbour that permits it comes with strict documentation and a short window to get it right.

Can You Exchange Into a Building You Already Own Part Of?

The rule sounds absolute: an exchange requires acquiring new property. Then a co owner wants out of the building you are already in, and the answer becomes more interesting.

Boot Netting: Cash Cures Debt, But Debt Never Cures Cash

Only net boot is taxed, and the offsets run in one direction only. Understanding which way they run separates a clean exchange from an unexpected bill.

Selling the Hotel, the Restaurant, the Practice: Only Part of That Price Can Be Exchanged

When a business sells with its building, the contract is really three sales at once. Since 2018 only one of them qualifies, and how the price is allocated decides your tax bill.

You Have to Name the Property Before You Finish Inspecting It

The 45 day rule forces an uncomfortable sequence: commit to a list first, learn what you actually bought second. Front loading diligence is the only real defence.

The Cooperation Clause Nobody Reads Until It Is Missing

Your purchase and sale agreement is where an exchange quietly succeeds or fails. The language is short, costs the other side nothing, and is far harder to add after signing.

The 30 Year Rule: When a Lease Counts as Owning the Land

A long ground lease is not fee ownership, but the tax code stops caring at a point. Thirty years of remaining term, options included, and a leasehold becomes like kind to real estate you own.

Protecting Your Exchange Funds: Segregated Accounts, Qualified Escrow and Qualified Trusts

Qualified intermediaries are not banks and are not federally regulated. How the regulations let you protect exchange funds, and the checklist that separates a safe arrangement from a hopeful one.

Your New Building Depreciates on Two Schedules, and Only One Is New

A common assumption after closing is that depreciation starts fresh. It does not. The carried over basis keeps running on its original clock, and only the money you added gets a new one.

Mineral Rights, Water Rights and Easements: The Real Property You Forgot You Owned

Not every 1031 exchange starts with a building. Perpetual water rights, some mineral interests and conservation easements can be real property, and they can be exchanged for apartment buildings.

Can You 1031 Exchange Into a REIT? The Short Answer and the Two Workarounds

REIT shares are securities, not real property, so exchange proceeds cannot buy them directly. The two routes investors use to end up in a REIT anyway, and what each one costs you.

Can You Do a 1031 Exchange Inside a Self Directed IRA? You Almost Certainly Do Not Need To

An IRA is already tax deferred, so there is usually no gain to defer. The real issues for real estate in an IRA are different ones: debt financed income and prohibited transactions.

The Zero Coupon DST: A Specialist Tool for the Heavily Leveraged Exchanger

Sell a property with a large mortgage and you must replace that debt or pay tax on the shortfall. One DST structure is built for exactly that problem, and it pays you nothing along the way.

Vesting Your Replacement Property: A Title Checklist Before Closing

How the replacement property is titled decides whether the exchange holds together. A practical checklist for LLCs, trusts, spouses, lenders and co owners before you sign.

How a DST Ends: The Exit Conversation to Have Before You Invest

Most DST material sells the entry. The part that decides your outcome is the exit, and some structures can hand that decision to the sponsor instead of you.

FIRPTA and the Foreign Seller: 15 Percent Withheld Before the Exchange Starts

A foreign owner can do a 1031 exchange. But federal law tells the buyer to withhold 15 percent of the price first, and getting it reduced takes paperwork that must be started early.

State Withholding on Out of State Sellers, and How an Exchange Avoids It

You structured the exchange perfectly, then escrow announces it will hold back a percentage of your sale price for a state you do not live in. Usually avoidable, but only if handled before closing.

Your Exchange Is Not Finished at Closing: Reporting It on Form 8824

You closed and deferred and moved on. But the IRS does not know any of that until you tell it. A 1031 exchange is only complete once it is reported, and one form does the telling.

Divorce and the 1031 Exchange: Untangling a Property Two People Own

The same taxpayer rule assumes the person who sells is the person who buys. Divorce breaks that assumption, and the fix depends on whether you act before the sale or after it.

What Happens If You Die in the Middle of a 1031 Exchange

The exchange does not automatically die with you. It can usually be completed by the estate, but the deadlines do not move, and how the estate acts decides whether heirs inherit a tax bill.

When a 1031 Exchange Fails: What Happens and the Timing Quirk That Can Help

Miss a deadline and the deferral is gone. But a failed exchange is not always taxed in the year you expect, because of how the 180 day window can straddle two tax years.

One Into Many, Many Into One: Reshaping a Portfolio With a 1031

A 1031 exchange does not have to be one building for one building. You can split a sale across several properties or consolidate a scattered portfolio into one. Same clock, different arithmetic.

Getting Out of a Tenancy in Common When Your Co Owners Will Not Sell

A TIC gives you a real deed to part of a building, and a real problem when co owners disagree. How exits work, what the TIC agreement controls, and how your share can still be exchanged.

Mortgage Boot: The Debt Rule That Surprises Investors at the Closing Table

Most investors know they must reinvest all their cash. Fewer know they usually must replace their debt too. Pay off a large mortgage and buy with a smaller one, and the gap is taxable.

What a 1031 Exchange Costs, and Which Fees Quietly Create a Tax Bill

Everyone asks what the intermediary charges. That is the small number. The one that matters is which closing costs you can pay from exchange funds without accidentally creating boot.

Can You Use an Opportunity Zone Fund and a 1031 Exchange on the Same Sale?

They are pitched as rivals, but one sale can sometimes use both. How splitting proceeds between a 1031 exchange and an opportunity zone investment works, and when it is worth the complexity.

The Partial 1031 Exchange: When Taking Some Cash Out Is the Right Call

A 1031 is only all or nothing if you want it to be. You can reinvest most of the proceeds, keep some cash, and pay tax on just that slice. Sometimes that is the smarter move.

Can You 1031 Exchange Raw Land? The Dirt Qualifies, the Intent Decides

Vacant land, farmland and ranches can all be exchanged tax deferred, and you can swap a field for an apartment building. What disqualifies land is not what it is, but why you hold it.

Can You 1031 Exchange an Airbnb? Yes, If It Is a Business and Not a Getaway

Short term rentals can qualify for a 1031 exchange. The challenge is not the nightly rental model, it is proving the property was held for investment rather than as your own holiday home.

Seller Financing in a 1031 Exchange: What Happens to the Carryback Note

A buyer asks you to carry part of the price as a note. It can close the deal and quietly break your exchange, because a note is not cash the intermediary can reinvest.

The 200 Percent and 95 Percent Rules, Worked Through With Numbers

Most investors use the three property rule and never look further. The other two identification rules can be powerful or dangerous. How each one actually works, with worked examples.

The 1033 Exchange: The Tax Break for When Selling Was Not Your Choice

A wildfire, a flood, or a letter exercising eminent domain. When property is taken from you, Section 1033 lets you defer the gain, and it is far more forgiving than a 1031.

Cost Segregation After a 1031 Exchange: Stacking Two Tax Tools

You deferred the gain. Now the replacement building can produce a wave of deductions. How cost segregation and a 1031 exchange work together, and the trap that comes with them.

How Long Do You Have to Hold a 1031 Property? The Honest Answer

There is no number in the tax code. Not one year, not two. What actually decides whether an exchange survives is something softer, and once understood, more reassuring.

Turning a 1031 Rental Into Your Home: How Deferred Tax Can Become Partly Tax Free

Exchange into a rental, move in years later, and the home sale exclusion can apply on top of your deferral. One of the most powerful moves in the code, and one of the easiest to get wrong.

Net Lease Tenant Risk: What Happens When the Only Tenant Leaves

A triple net lease can feel like a bond with a building attached, until the one tenant stops paying. How to read the risk before you exchange into a single tenant property.

Buying Your Replacement Property From a Relative: When the IRS Allows It

Selling to family has one set of rules. Buying your replacement property from family has a stricter one. Why the IRS scrutinises it, and the narrow situations where it can still work.

Like Kind in Practice: Eight Exchanges That Surprise People

The rules say like kind. Real transactions show how broad that is. Eight examples of what can and cannot be exchanged, from farmland into apartments to what happens with overseas property.

Before a 721 Conversion: Eight Questions About the One Way Door

A 721 UPREIT can end your real estate decisions with diversification and some liquidity. It also closes the 1031 door behind you. The questions to answer before you walk through.

The Last Exchange Matters Most: Planning the Property Your Heirs Inherit

Serial exchanges defer tax for decades, and the step up in basis can erase it. But what your heirs actually receive, and how easily they can divide it, depends on decisions made years earlier.

The Same Taxpayer Rule: The Title Change That Quietly Kills an Exchange

Whoever sells the old property has to be whoever buys the new one. Add a spouse, form the wrong entity or change how title is held mid exchange, and the deferral can vanish.

Want Cash From Your Property Without the Tax? Refinance After the Exchange

Borrowing against property is not taxable, which makes a cash out refinance a clean way to free equity. Do it on the eve of your exchange, though, and the IRS may call that cash boot.

Drop and Swap: When Partners Want Out in Different Directions

Two partners, one building, and no longer the same plan. One wants cash, one wants to keep deferring. The rule that blocks them both, and the restructuring that can free them.

When a 1031 Exchange Is the Wrong Move

Deferring tax is not free, and sometimes paying it is the smarter decision. Six situations where skipping the exchange deserves serious consideration.

The 180 Day Clock, Week by Week: A Closing Playbook

The day your sale closes, two clocks start and they do not stop for anything. How a disciplined investor spends those 180 days so the deadline becomes a structure rather than a cliff.

Building Your Replacement Property With Exchange Dollars

An improvement exchange lets you use deferred gain to build or renovate the replacement property. The catch is a 180 day construction clock that humbles ambitious plans.

Can You 1031 Exchange a Vacation Home? Only If You Clear This Test

The beach house feels like an investment, particularly at tax time. Whether the IRS agrees comes down to a specific rental and personal use test with hard numbers.

California's Clawback: The State Still Wants Its Share

You exchanged out of California into a property two states away and did everything correctly. California still expects a form every year, and a cheque when you eventually sell.

Buy First, Sell Later: How a Reverse 1031 Exchange Works

You found the replacement before you sold the original. A reverse exchange flips the order and keeps the gain deferred, if you can clear two hurdles most people never see coming.

Choosing a Qualified Intermediary Before Your Exchange Starts

Qualified Intermediaries hold your entire sale proceeds and are not federally regulated. What to ask, what to insist on, and why this decision has to happen before closing.

Seven Questions That Separate DST Sponsors

More inventory means more sponsors, and not all of them belong on a 45 day identification list. The questions that reveal which is which, and what the answers should sound like.

Inside the 45 Day Clock: How to Identify Without Panicking

What identification actually requires, how the three rules differ, and why experienced investors name a backup they never intend to buy.

Depreciation Recapture: The Tax Almost Nobody Budgets For

Every year of depreciation you deducted comes back at sale, taxed at up to 25 percent before capital gains even start. Why long hold owners are surprised, and how an exchange defers it.

Boot: The Part of a Fully Deferred Exchange That Is Still Taxable

Leftover cash or reduced mortgage debt can make part of a supposedly complete exchange taxable. What boot is, how the IRS taxes it, and the discipline that removes it.

1031 Exchange or DST? You Are Choosing Between Two Chairs

Both defer capital gains tax. Only one keeps you in the landlord's chair. A practical comparison of active replacement property against a passive Delaware Statutory Trust.

The Tired Landlord's Guide to Stepping Back

How owners are trading the 2am maintenance call for professionally managed real estate without triggering a tax bill, and what they give up to do it.

How to Compare Two DST Offerings

Two Delaware Statutory Trusts can look identical and suit completely different investors. The five numbers to compare first, what they will not tell you, and the questions worth asking before you commit.

The Three Identification Rules, Properly Explained

You may name three properties, or any number up to twice what you sold, or any number at all if you buy almost all of it. Most people only know the first one.

What Happens When a DST Sells

The question that stops most people investing in a Delaware Statutory Trust is what happens at the end of it. Here is the answer, including the part nobody mentions.

Like Kind Does Not Mean Similar

The most common misconception in a 1031 exchange is that you have to buy the same sort of property you sold. You do not, and the rule is far wider than almost anyone assumes.

What a DST Actually Costs You

Not every dollar you invest in a Delaware Statutory Trust buys real estate. Some of it pays for the structure. Here is where to find the number and how to judge it.

Your Identified Property Just Fell Through

After day 45 your list is closed. If the deal you were counting on collapses on day 60, you cannot add a new one, and your money stays locked until day 180.

You Reinvested Everything and Still Owe Tax

If your property carried a mortgage, reinvesting all of your cash is not enough. The debt has to be replaced too, and the shortfall is taxable.

The Deadline That Is Not 180 Days

Sell late in the year and your exchange window can close in April, not May or June. The fix is a form most sellers never think to file.

1031 Related-Party Rules and the 2-Year Trap

Exchanging with family in a 1031? Section 1031(f) can undo a valid exchange two years later — and the trigger sits with the other party.

1031 Exchange vs Deferred Sales Trust

How a Deferred Sales Trust differs from a 1031 exchange — the mechanics, the IRS scrutiny, and what to ask before considering one.

DST vs NNN: Which Fits Your 1031 Exchange?

Compare Delaware Statutory Trusts and net-lease property for a 1031 exchange: control, closing speed, minimums, financing, and exit.

DST vs. Opportunity Zone: Which Defers More?

A 1031 exchange into a DST and a Qualified Opportunity Zone Fund both let you delay capital gains tax, but they defer different amounts, on different timelines, with very different rules.

The 1031 Exchange Timeline: 45 and 180 Days

A practical, deadline-by-deadline guide to the 45-day identification and 180-day closing windows that govern every 1031 exchange, and how DSTs are used as a backup.

What Is a Delaware Statutory Trust (DST)?

A Delaware Statutory Trust lets accredited investors own fractional, passive interests in institutional real estate that can qualify as replacement property in a 1031 exchange.