There are several types of 1031 exchanges, the process is different for each type. These are the steps for the most common type of 1031 exchange, a delayed exchange.
Delayed Exchange – Property is sold and replacement property is purchased within 180 days. Replacement property must be identified within 45 days. Because of the 180 day window this is the most popular type of 1031 exchange.
STEP 1 – PLAN THE TRANSACTION.
Call us to discuss your transaction. After listening to your investment objectives we’ll determine the best way to structure your transaction. We’ll even share the right questions to ask your CPA to determine the exact amount of capital gains you’ll save.
STEP 2 – PURCHASE & SALE AGREEMENT.
The exchange begins with a standard purchase and sale agreement. The agreement should contain language which establishes the exchanger’s intent to exchange and obtains the buyers consent to cooperate. Our facilitator will convert this “sale” transaction into an exchange with the use of specialized documentation. It is important we have at least 5 days before the property is sold to complete this documentation.
STEP 3 – RELINQUISHED PROPERTY.
Once you have decided to perform an exchange contact us immediately. Also notify all parties to the transaction of your intent to exchange, including your real estate agent, closing agent, accountant, and attorney.
Our facilitator will collect the information needed to prepare the exchange documents. The originals will be forwarded to the closing agent for execution at closing. Copes are sent to all parties for review. At closing the exchanger will transfer the relinquished property to Xchange Solutions and Xchange solutions will simultaneously sell the property to the buyer. The proceeds are then paid the exchange accommodator and held for the acquisition of the replacement property.
STEP 4 – REPLACEMENT PROPERTY.
After closing the relinquished property, the exchanger has 45 days to identify the replacement property and 180 days to complete the exchange. The exchanger notifies the exchange accommodator once they have entered into an agreement to purchase the replacement property. They will deliver the documents needed to complete the exchange to the closing agent. At closing, the property is purchased by the exchange accommodator and transferred to the exchanger. The exchange is now complete.
Your exchange facilitator is available at every stage to answer questions from your accountant, CPA, or attorney. We’re specialists in these areas of the local and national tax code so we can provide the expert help they want.
To Start An Exchange
Just go to StartAnExchange.com and enter the information you currently have. We will call you back with instructions within 1 business day.