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1031 Exchange Rules


1031 Exchange Rules

When choosing a replacement 1031 exchange investment property for the 1031 exchange, the property owner must follow one of the following 1031 exchange rules:

  • The Three-Investment Property Rule - No more than three investment properties regardless of their market values, may be chosen as potential replacement investment properties within 45 days of the close of escrow on the relinquished investment property. Said investment properties must be acquired within 180 days of the close of escrow on the relinquished investment property.

  • The 200% Rule - States that, in the event that three or more replacement investment properties are used, their total market value must not exceed 200% of the value of the investment property that is being relinquished.

  • The 95% Exception - Finally, in the case that rules 1 and 2 do not apply, the aggregate value of the like kind investment properties must account for at least 95% of the value of the investment property being sold in order for the exchange to qualify.

    Contact us for more questions regarding 1031 exchanges and TIC exchanges and we will put you in contact with a specialist in your area.

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