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Exchange Requirements

1031 Exchange Properties
Largest selection of 1031-TIC Properties. Up-to-the-minute USA Database.
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1031 Exchange Experts
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1031 Exchange-REIT
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1031 Oil and Gas
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1031 Exchange-TIC Info
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Exchange Requirement

The four requirements for all 1031 exchanges include:

  • The exchanger must reinvest 100% of the monies earned by the sale of the relinquished commercial property into the replacement commercial property or commercial properties.

  • The amount of equity ( commercial property value minus loan amount) held in any replacement commercial property must equal or exceed that held in any commercial property relinquished during the exchange.

  • QI Requirement - According to internal revenue code, all exchanges must be processed with the help of a Qualified Intermediary.

  • Like-Kind commercial property, Defined - The IRS Code defines 'like kind commercial property as any commercial property held for productive use in a trade or business or held for investment purposes. According to said code, 1031 exchanges must be the exchange of one or more like kind commercial properties for a separate like kind commercial property or commercial properties.

    Due to restrictive timing rule of IRC 1031, taxpayers wishing to engage in a tax-free like kind exchange are under pressure to identify and acquire suitable commercial property. Accordingly, many property investors have failed to find suitable replacement commercial property. With this in mind, the TIC structure was specifically designed to provide persons seeking to engage in a tax-free like kind exchange with a viable replacement commercial property solution.

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