Best Practices for Identifying Property in a 1031 Exchange

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Properly identifying replacement property is often the most challenging part of a 1031 exchange. In this article, we are going to discuss some best practices for identifying property in a 1031 exchange.

Required Elements

There are certain required elements needed for a valid identification of replacement property in any 1031 exchange. Here are a few things to keep in mind

  1. You need to designate your property clearly and specifically in writing to your qualified intermediary.

  2. You must use the postal address(es) of the property (including House/Building Number, Street Name, City, County, State, and Zip Code), and/or the complete legal description (including the Metes and Bounds description, or Lot and Block or Other Subdivisions, or Condominium Unit Number and Name) and/or the County Tax Assessor's Parcel Number (APN, PID or Property Tax Identification Number) or you can use the property’s distinctive name, such as “The Empire State Building”

  3. You have to send your written identification to your intermediary before Midnight of the 45th day after the closing of the sale of your relinquished property.

As a general rule, you want to be as specific as humanly possible when identifying replacement property in a 1031 exchange. The more specific you are, the better chance your exchange has of being a success.

Speak with a Qualified Intermediary

If you are looking to defer your capital gains taxes when selling real estate, a 1031 exchange is the answer you’ve been searching for! By rolling your net proceeds into a new replacement property you can effectively defer your capital gains taxes and keep your money working for you. Our intermediaries have two decades of experience working with clients on all types of 1031 exchanges. Reach out to us today to learn more about our 1031 exchange services and to speak with a qualified intermediary about your transaction.

  • Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

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Defer the tax. MAXIMIZE your gain.