5 steps to a successful 1031 exchange

The 1031 Exchange Process

1) List your investment property for sale!  Call me for a QUALIFIED agent in your area.  The process will go nowhere until you get the property SOLD!

 
2) When you accept an offer, make sure your real estate agent knows that you wish to do a 1031 exchange.  Most contract have the provision built-in, but don’t assume yours automatically does. 

3) Open escrow and chose a qualified intermediary (QI). The QI will hold the proceeds of the sale until the purchase of a “like kind” replacement property, so you personally never receive monies from the closing.  That could void the 1031 exchange.  

4) As an exchanger, you now have 180 days to complete the 1031 exchange.
        a. The first 45 days after the close to identify replacement property(ies) You can choose multiple properties.
        b. 180 days to complete the exchange anmd close.

5) At the closing of the replacement property, the QI will transfer the proceeds and arrange for the transfer of the deed directly to you. 

Is it really this simple to avoid Capital Gains taxes on highly appreciated property (possibly up to 40% of the gain) and also avoid depreciation recapture?  The answer is yes, but you need to use an agent that is qualified and understands 1031 exchanges.   

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