Real Estate

1031 Exchanges

Discover how to leverage 1031 exchanges to enhance your investment portfolio and secure your financial future.

Getting to Know 1031 Exchanges

The 1031 Exchange, derived from Internal Revenue Code Section 1031, allows an investor or business owner to sell an investment property and defer taxes on their capital gains. This is achieved by reinvesting the proceeds into another “like-kind” property (passive or active ownership) of equal or greater value within 180 days from the closing date, with the help of a qualified intermediary. This strategic financial tool has been in existence since 1921, allowing for the preservation and enhancement of wealth through the deferral of taxes.

Steps Towards Completing a 1031 Exchange

The path toward successful 1031 exchanges includes incorporating and understanding several key steps:



Proper planning is key. Consult with financial, tax and real estate advisors early on in the process to organize your financial picture and find replacement property(ies).


Choose a Qualified Intermediary (QI)

Select a reputable QI to hold funds from the sale and transfer them for the replacement property purchase.


Sell Your Existing Property

Include 1031 exchange language in the sales contract and avoid taking possession of the cash proceeds directly.


Identify Replacement Property

Use one of the three identification methods (3-Property Rule, 200% Rule, 95% Rule) within the 45-day identification period.


Purchase Replacement Property

Add 1031 exchange language to the purchase contract and review the closing statement with your tax advisor and QI.


Report the Exchange

Ensure your tax advisor accurately completes IRS Form 8824 and includes it with your tax return for the year you sold your property.

180 Day Timeline

Day 1

Sell your property

By Day 45

Find a Replacement

By Day 180

Close on New Property

1031 Exchange
Investment Options

Investors seeking "like-kind" replacement properties for their 1031 exchange have various options. They can choose between actively managed and passively managed investments, as well as full or fractional ownership positions.


  • Delaware Statutory Trusts (DSTs)
  • Tenants-in-Common (TICs)
  • 721 Exchange/UPREIT


  • Net Leased (NNN)
  • Direct Ownership

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Your Guide to a 1031 Exchange

Unlock the potential of 1031 Exchanges with our expert guide, designed to elevate your real estate investment strategy with insights into tax deferral, portfolio growth, and wealth preservation.

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