1031 Exchange Rules
1031 Exchange Rules
When choosing a replacement 1031 exchange
rental real estate for the 1031 exchange, the
real estate investor must follow one of the following 1031 exchange rules:
The Three-Rental Real Estate Rule - No more than three rental real estate regardless of their market values, may be chosen as potential replacement rental real estate within 45 days of the close of escrow on the relinquished rental real estate. Said rental real estate must be acquired within 180 days of the close of escrow on the relinquished rental real estate.
The 200% Rule - States that, in the event that three or more replacement rental real estate are used, their total market value must not exceed 200% of the value of the rental real estate that is being relinquished.
The 95% Exception - Finally, in the case that rules 1 and 2 do not apply, the aggregate value of the like kind rental real estate must account for at least 95% of the value of the rental real estate being sold in order for the exchange to qualify.
Contact us for more questions regarding 1031 exchanges and tenant in common exchanges and we will put you in contact with a specialist in your area.