1031 Rules

A number of rules govern 1031 real estate exchanges. Some of them have to do with the identification of replacement property. Following is a brief summary of some of the major requirements.

The property or properties must be identified in writing and must be identified before midnight of the 45th day after title to the relinquished property has been transferred. To be properly identified, the property must clearly identified by street address, legal description, or "distinguishable name." There are limits on the number of properties that can be identified.

Three properties may be identified, regardless of their fair market value, individually or collectively. A larger number of properties may be identified if their collective value does not exceed 200 percent of the value of the property or properties that were relinquished. An alternate rule is the 95 percent rule. Under this provision, the investor may identify any number of properties, provided that the investor must close 95 percent of the properties identified within the 180-day period following the disposition of the relinquished property or properties.

At TM 1031 Exchange, our focus is on helping investors develop appropriate strategies for identifying replacement properties. We concentrate on helping you find replacement properties within the rules that will support your overall investment goals. For more information on our services and replacement properties, please call 1-877-4TM-1031 or send an email here info@tm1031exchange.com.