Tax Deferred Exchange Requirements

Tax Deferred Exchange Requirement

The four requirements for all tax deferred exchanges include:

  • The exchanger must reinvest 100% of the monies earned by the sale of the relinquished property into the replacement property or properties.

  • The amount of equity ( property value minus loan amount) held in any replacement property must equal or exceed that held in any property relinquished during the exchange.

  • Third, each investor must use a Qualified Intermediary (QI) to oversee the transaction. A QI is a qualified individual that prepares the paperwork, holds all proceeds from the transaction, and provides any technical advise on the exchange process.

  • Finally, all tax deferred exchanges require the exchange of like kind property for other like kind property. A definition of such may be found in IRS 1031 tax code.

    For more information on tax deferred exchanges or TIC exchanges, or to be put in contact with a licensed TIC advisor, contact us today!



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