What are the Limits of a 1031 Construction Exchange?

1031 Construction Exchange

A built-to-suit construction exchange is great because it allows you to construct improvements to your replacement property before exchanging into it. In this article, we are going to talk about the limits of a 1031 build-to-suit construction exchange.

Time Constraints

A build-to-suit construction exchange sounds incredible, but it is not free from restrictions. Just like any other 1031 exchange, a build-to-suit exchange needs to abide by the 180 day exchange period. That means you’ve only got 180 days total to complete your construction improvements and finish your exchange. Any improvements you want to make need to be finished within 180 days, so your options are limited by timing.

But don’t let that discourage you! While you may not be able to tear down and construct a whole new building, you likely have time to replace some flooring, put up some dry wall, or construct other minor improvements that can add up. This is also a great way to get your replacement property closer to your ideal property.

Minnesota Like-Kind Exchange Company

A like-kind exchange is a great way to defer taxes when selling real estate, and a qualified intermediary is the best person to have on your team when starting an exchange. The Commercial Partners Exchange Company intermediaries have twenty years of experience on their side and can walk you through each stage of your exchange. Get started with your 1031 exchange by contacting one of our qualified intermediaries today at our downtown Minneapolis offices or one of our other offices around the United States.

  • 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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