1031 Exchange Requirements

1031 Exchange Requirement

There are four distinct requirements applicable to all 1031 exchanges :

  • In order to qualify as a 1031 exchange, 100% of the monies earned through the sale of any rental real estate must be reinvested in the replacement rental real estate.

  • Also, the amount of equity held in any like kind rental real estate for reinvestment must be greater than or equal to that of the relinquished rental real estate.

  • Each exchange, including tenant in common exchanges, requires the use of a Qualified Intermediary to hold all proceeds of the transaction, prepare any paperwork, and answer any technical questions involved with the exchange.

  • Finally, a 1031 exchange is defined as the exchange of any like kind rental real estate or rental real estate for another like kind replacement rental real estate or rental real estate. As such, all rental real estate involved in the exchange must be qualified like kind rental real estate in order to incur the benefits involved with any 1031 tenant in common exchange.



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