Tools and Checklists

Explore our Tools section for checklists, FAQs and more
• How 1031s Stimulate the Economy
• 1031 Checklist for Brokers
• 1031 Checklist for Exchangors
• 1031 Deadlines
• 1031 FAQs basic
• 1031 FAQs comprehensive
• 1031 Rules for identifying replacement property
• 1031 Vacation home qualifications
• 1031 Rent to Relative
• Understanding Like-Kind Exchange
• Forward Exchange Process Guide
• Reverse Exchange Process Guide
• Transforming Tax Liability into Cash Flow
• Property Improvement Exchange
• REAL 1031 Trifold
• How to Discuss 1031 Exchange with Customers

How 1031s Stimulate the Economy

There are many misconceptions out there around 1031 exchanges, including that 1031 exchanges are only for the extremely wealthy and that 1031 exchanges are tax avoidance. The truth is 1031 Exchanges have been stimulating the economy, and benefitting exchangers across all income brackets, for over 100 years. View PDF for all the ways 1031 exchanges help stimulate the economy.

1031 Checklist for Brokers

Brokers, add value for your clients by suggesting the use of a 1031 exchange in the right situation.

• The seller must be a qualified taxpayer. Meaning, they have a tax ID or social security number that could be required to pay federal income tax.
• To qualify property must be real property that has been an investment property for a requisite holding period.
• In the contract, or an addendum, disclose your client’s participation in a 1031 Exchange. The recital for the sale of the relinquished property can simply be: “Seller to participate in a 1031 Exchange at no additional cost to the Buyer.” An optional check-the-box provision or exchange cooperation
  clause are also customary in most pre-printed form real estate contracts.
• Want more? Open PDF to view complete list.

1031 Checklist for Exchangors

Here's how to begin the process:

• Enter into a contract for the sale of your relinquished property
• Include a 1031 exchange recital or check the 1031 tax deferred exchange box in the contract notifying the buyer of your intent
• Provide contact information for your settlement agent to TRG Exchange
• When your sale closes, proceeds will be delivered to us as the Qualified
  Intermediary (QI)
• At this point your 180-day window to complete your exchange begins
• Want more? Open PDF to view complete list.

1031 Deadlines

Deadlines are essential to executing a successful 1031 exchange.

• 45-Day Identification Period. From the date of closing on the sale of your relinquished property you have 45 days to identify any replacement properties you plan to purchase. For example, if the date of closing for your relinquished property records on January 3rd, you must identify potential replacement properties by February 17th.
• 180-Day Exchange Period. From the date of closing the deed records on the sale of your relinquished property, you have 180 days to close on replacement properties. For example, if the date of closing for your relinquished property records on January 3rd, the purchase of any replacement properties must be completed by July 2nd.
• Want more? Open PDF to view other important considerations.

1031 FAQs, basic

• How long do I have to identify replacement property? The replacement properties must be identified within 45 days after the sale of the relinquished property. This requirement is strictly enforced, and no extensions are possible. Identification must be in writing, signed and dated and received by TRG Exchange no later than 45 days after the sale of relinquished property. Replacement property must be identified unambiguously. Usually, either a legal description or a mailing address is sufficient. The IRC has rules on how many properties you may identify.
• How long do I have to purchase the replacement property? The replacement property must be purchased within 180 days after the sale of the relinquished property. This requirement is strictly enforced, and no extensions are possible, except in extremely limited circumstances. The time period may be shorter if you are required to file a tax return prior to the expiration of the 180-day period and you do not seek an extension to file your return.
• View PDF to see the other three important tips

1031 FAQs, comprehensive

• Am I limited to how many properties I may identify? The IRC limits the number of properties you may identify. You are basically limited to identifying 3 properties. You may identify more than 3 properties if the combined fair market values of the properties you identify do not exceed two times the sales price of the relinquished property. Otherwise, you have to close on 95% of the identified replacement properties to have a valid exchange.
• What property is like kind to my property? When it comes to real estate, all real estate is basically like-kind to all other real estate. For example, one building could be exchanged for an apartment complex or bare ground could be exchanged for a duplex. The two types of real property that generally don't qualify for 1031 exchange purposes are a person’s personal residence or a vacation home.
• View PDF to see all 10 tips.

1031 Rules for identifying replacement property

• 3 property rule
• 200% rule
• 95% rule
• View PDF to see explanation of the 3 rules.

1031 Vacation home qualifications

Want to convert your rental or vacation home?

• Occasionally, an investor may decide to live in their rental property and claim it as their primary residence.
• When it is a property that has been involved in a 1031 Exchange, it could be considered a taxable event. Changing the character of the asset could result in realizing capital gains from the original sale. To fully understand the tax consequences of this action you will want to visit with an experienced CPA and consult with Real 1031.
• View PDF to see successful conversion tips.

1031 Rent to Relative

Can I rent my 1031 exchange property to a relative?

• We answer commonly asked questions regarding renting out a 1031 exchange property to a relative and how to ensure you do not compromise the validity of your 1031 exchange by doing so..
• View PDF to see the conversational flow chart.

Understanding Like-Kind Exchange

A 1031 exchange, or like-kind exchange (LKE), allows you to defer various forms of taxes—including capital gains, depreciation recapture, and state tax in most states. When you sell real estate that meets these requirements:

• Like-kind Requirement
• Exchange Requirement
• Holding Requirement
• Qualified Use Requirement
• Time Limits/Identification Requirement
• No constructive or actual receipt of exchange funds
• Want more? View PDF to see explanations.

Transforming Tax Liability into Cash Flow 

• Section 1031 of the tax code allows owners of qualified real estate to sell the property without having to pay taxes on the gain from the sale.
• A qualified intermediary, such as Real 1031, can help you:
  - Defer taxes on gains realized from selling investment/business property,
  - Take advantage of safe harbors,
  - Effectively and efficiently manage an exchange from start to finish.
• View PDF to see what properties are eligible.

Forward Exchange Process Guide

Gain a better understanding of the step-by-step process of a traditional forward 1031 exchange in this guide.

• Open PDF for more information.

Reverse Exchange Process Guide

When an exchange involved purchasing the replacement property BEFORE selling the relinquished property, a Reverse Exchange is required. Learn more about the step-by-step process of a Reverse 1031 exchange where the replacement property is "parked."

• Open PDF for more information.

Property Improvement Exchange

When an exchange involves replacement (new) property that is land to be constructed upon or a structure requiring improvements, a build-to-suit or a property improvement exchange will allow for the inclusion of the improvement costs in the exchange value of the replacement property.

• Open PDF for more information.

Real 1031 Trifold

Real 1031 is the leading, independent, trusted managed service provider of 1031 exchanges. We specialize in these complex financial transactions, so you don’t have to.

• What is a 1031 Exchange?
  Section 1031 of the tax code allows owners of qualified real estate to sell the property without paying taxes on the gain from the sale, as long as the sales proceeds or exchange value is used to acquire like-kind replacement property.
• Why Choose Real 1031?
  - Dedicated service managers provide individualized service
  - Client funds held in segregated accounts at top-rated financial institutions
  - Multiple certified exchange specialists on staff
  - Board-level member of the Federation of Exchange Accommodators (FEA)
• View brochure for more information.

How to Discuss a 1031 Exchange with Your Customers:

Real 1031 is the leading, independent, trusted managed service provider of 1031 exchanges. We specialize in these complex financial transactions, so you don’t have to.

• View PDF to see the conversational flow chart

NOTE: This material is not intended to be relied upon as a statement of the law, and is not to be construed as legal, tax or investment advice. You are encouraged to consult your legal, tax or investment professional for specific advice. The material is meant for general illustration and/or informational purposes only. Although the information has been gathered from sources believed to be reliable, no representation is made as to its accuracy. Intended for distribution to only one per individual for marketing purposes only on behalf of our company. Not for reproduction.