Home » Finance

Things You Should Know About Replacement Properties in 1031 Exchange

Aug 12, 2017
Ask any investor who's willing to defer taxes via 1031 exchange, and you will come to know that finding the replacement property is one of their biggest challenges. If you are also facing this obstacle, we are here to help. To identify the property within the deadline (45 days), you need to follow three rules of identification.

1) The very first rule says that you can identify a maximum of three replacement properties irrespective of their market value. This is referred as the three property rule.
2) If you want to identify more than three properties, the total of their market value should not cross 200 percent of the total of relinquished properties' fair market value. This is referred as the 200 rule.
3) You can identify any number of properties irrespective of the total fair market value, as long as the value of the acquired properties is at least 95 percent of the identified replacement properties' market value. This is the 95 % rule.

Like-kind properties

Apart from this rule, you must make sure the exchange is like-kind. Like-kind property refers to the property of the same nature, class, or character. It does not matter what's the grade or quality of the properties being exchanged. The like-kind exchange also means that the properties must be held for investment purposes or use in a business or trade. You can't utilize personal-use properties for this exchange, such as primary residence, vacation home, or a second home. You can exchange vacant land for a real property improved with a residential rental house. It should be remembered that you can't purchase a replacement property located outside of the US.

What's excluded from the exchange?

1. Section 1031 excludes following properties from the exchange:
2. Certificates of trust
3. Bonds, stocks, or notes
4. Partnership interests
5. Inventory or stock in trade

DST as replacement properties

Did you know that you can use Delaware Statutory Trust (DST) as replacement property in 1031 exchange? A lot of investors who are unaware of this fact face difficulties identifying properties.

We, at FAI Exchange, will help you locate DST investments that meet all the requirements of this exchange process.
About the Author
Check our website to know more about replacement property in 1031 exchange and how we will help you find one: fai1031.com. You can ask your replacement properties-related queries through this number: (888) 669-3332.
Rating:
Please Rate:
(Average: Not rated)
Print Email Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Buying
    • Selling
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources