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Steps To A 1031 Exchange
By Priya Jestin, Staff Writer
I think I’ve gone too much into the intricacies of 1031 exchanges and steps to avoid unnecessary taxation. It’s time we took a deep breath and just simply jotted down the various little steps we must take to complete a 1031 exchange.
- The first thing required is that you must have some kind of investment property that you want to sell and do a 1031 exchange.
- Next, you contact a qualified intermediary and enter into an agreement.
- Then you put your investment property on the market. Once a suitable buyer contacts you, the QI accepts and signs the property’s purchase offer.
- Next, the escrow for the sale is opened, and a preliminary title report is produced.
- The QI sends required exchange documents to the escrow closer for signing at property closing after which the escrow closes.
- Once the escrow on the sale closes, you have 45 days to identify like-kind replacement properties.
- You can zero in on three properties for purchase. You have to make your final decision and finish the entire process within 180 days after the close of escrow on the sale of the relinquished property. This is called the "Exchange Period". This completes the exchange.
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