Stages of a 1031 Tax Deferred Exchange

"Follow These Simple Steps for a Successful Transaction"

STEP #1 - Sale of the Relinquished Property

(a) Phone consultation with a qualified 1031 Exchange professional.

(b) Exchange opened with a qualified 1031 Exchange professional.

(c) Pursuant to the Exchange Agreement, an Assignment is executed prior to closing and the 1031 Deferred Exchange professional assumes the Exchanger's Purchase and Sale Contract.

(d) The qualified 1031 Exchange professional instructs the closing officer to directly deed the property from the Exchanger to the buyer.

(e) Proceeds are transferred directly to the 1031 Exchange expert via wire transfer. They set up a separate "Qualified Exchange Account" for each Exchanger.

STEP #2 - IDENTIFICATION OF REPLACEMENT PROPERTY

(a) The 1031 Exchange professional provides Exchanger confirmation of exchange proceeds received; the 45-Day Identification Period and 180-Day Exchange Period; the specific identification requirements; summary of the Identification Rules.

(b) Exchanger properly identifies potential replacement properties under either the Three Property Rule, 200% Rule or the 95% Rule.

STEP #3 - PURCHASE OF REPLACEMENT PROPERTY

(a) Exchanger has a total of 180 calendar days from the relinquished property closing date, or their tax filing date, whichever is earlier, to acquire "like-kind" replacement properties.

(b) Prior to closing on the replacement property, Exchanger assigns the Purchase & Sale Contract to the 1031 Exchange expert.

(c) After the Assignment is executed, the exchange is complete when the 1031 Exchange expert purchases the replacement property with the exchange proceeds and transfers it to the Exchanger by a direct deed from the seller.

For more details of on the 1031 Tax Deferred Exchange, visit Asset Preservation, Inc.