1031 Exchange Properties
Largest selection of 1031-TIC Properties. Up-to-the-minute USA Database.
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1031 Exchange Experts
Learn from the experts. Gain access to select TIC Properties Nationwide.
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1031 Exchange-REIT
Learn about 1031-REIT Exchanges. Exchange into a REIT 100% Tax Free!
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1031 Oil and Gas
Increase Cash Flow, Decreased Risk, Inflation Hedge, Diversification.
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1031 Exchange-TIC Info
Difficulty Finding NNN Property? Consider NNN Tenant in Common.
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1031 Exchange Requirement

To fully defer all capital gains taxes, all 1031 exchanges must meet four separate requirements:

  • First, 100% of all proceeds from the sale of the first income real estate must be reinvested into the second, replacement income real estate.

  • Second, the amount of equity ( income real estate value minus loan value) of the replacement income real estate must be equal to or greater than that of the relinquished income real estate.



  • Third 1031 Exchange Requirement: By law, you must use an independent third party, called a Qualified Intermediary, to hold the proceeds of the sale. The Qualified Intermediary also will prepare the legal documents required to link together, as a qualified exchange, the sale of the old income real estate and the purchase of the new income real estate.

  • Fourth 1031 Exchange Requirement: exchanged income real estate must be like kind. For an income real estate exchange this means real-income real estate for real-income real estate, but not necessarily land for land or a rental house for another rental house.

    It is often difficult in the short 45-day time frame to locate an income real estate that has the right purchase price, debt ratio, and closing schedule to meet the 1031 Exchange Requirements-and then arrange any financing that may be necessary. Because there is a steady supply of tenant in common income real estate available they are an ideal solution for exchangers seeking management free 1031 real estate with steady income.

    1031 Exchange Rules

    1031 Identification Rules

    1031 Exchange Rules require real estate investors to identify like kind income real estate for replacement within 45 days of the close of escrow on the relinquished income real estate. Furthermore, all replacement income real estate must be acquired within 180 days of close on the relinquished income real estate. All 1031 exchanges must comply with one of the follow three rules:

  • The Three-Income Real Estate Rule - This rule allows the exchanger to identify up to, but no more than 3 potential income real estate as qualified replacement income real estate within the allotted time frame.



  • The Two Hundred Percent Rule - In the event that three or more like kind income real estate serve as replacement income real estate, the aggregate value of said income real estate can not exceed 200% of the value of the income real estate sold.

  • The Ninety-five Percent Exception - Finally, in the event that rules 1 and 2 do not apply to the exchange, the Ninety-Five Percent Rule takes precedence. This rule dictates that the aggregate value of the acquired income real estate must account for at least 95% of the value of the relinquished income real estate when sold. This means that in order to engage in a 1031 exchange, foregoing all capital gains on the transaction, the real estate investor must reinvest at least 95% of the proceeds involved in the transaction.

    Many 1031 exchangers prefer buying income real estate as tenant in common because of the ease of completing the transaction and closing on income real estate.


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