Rules: 45 days to identify replacements, 180 days to close, use a Qualified Intermediary (never touch the funds), replacement price ≥ relinquished sale price, all equity reinvested. Fail any rule → full tax bill.
Entities & Tax
1031 Exchange
IRS §1031 lets you defer capital gains tax when selling investment real estate and reinvesting into a like-kind property.
More in Entities & Tax
- Qualified Intermediary (QI)— A neutral third party that holds 1031 exchange proceeds — required by the IRS.
- Cost Segregation Study— An engineering-based analysis that reclassifies parts of a building into shorter depreciat…
- Depreciation— The non-cash annual expense that lets you deduct the wear-and-tear of a rental building ag…
- Bonus Depreciation— A federal provision letting investors deduct a large percentage of qualifying property in …
- Depreciation Recapture— When you sell, the IRS 'recaptures' depreciation you claimed, taxing it at up to 25%.
- Capital Gains Tax— Federal tax on the profit from selling an asset held for gain.