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1031 Exchange Requirements


1031 Exchange Requirement

All 1031 exchanges, including TIC exchanges, must adhere to the following requirements:

  • The total money reinvested into the like kind investment property must equal or be greater than the value of the relinquished investment property. In other words, 100% of the assets from the sale of the first investment property must be rolled into the second investment.

  • The amount of equity ( investment property value minus loan amt. ) of the acquired investment property must be equal to or greater than that of the investment property being sold.

  • Each exchange, including TIC 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 investment property or investment properties for another like kind replacement investment property or investment properties. As such, all investment properties involved in the exchange must be qualified like kind investment properties in order to incur the benefits involved with any 1031 TIC exchange.

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