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Seven Important Points to Remember About 1031 Exchanges!
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 1. A 1031 Exchange is not a tax loophole. It is a code section
written by congress specifically to allow anyone who meet a set of requirements to
sell property and "defer" paying tax on the gain.
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2. Stated simply, old property and the new property must be of
investment "kind" real estate...house rental for an apartment house, commercial building
for bare land, etc. If this test is met, you may exchange any type of real estate
for any other type of real estate.
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3. You have 45 days from the closing date of the old property to
determine a list of property you wish to buy.
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4. In addition, you have 180 days to close the purchase of one of the properties listed on your 45-day list.
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5. YOU CANNOT TOUCH THE MONEY. By law, the money is held by a "Qualified Intermediary" which is sometimes called an Accommodator or a
Facilitator. You cannot leave the monies in escrow until the second property is aquired,
nor can you have a friend, employee, broker or even your CPA or attorney hold the
money for you.
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6. The title holder of the old property has to remain the title holder of the new property.
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7. You must reinvest all your cash proceeds and buy a property
of equal or greater value.
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Others Reasons Real Estate Investors Exchange Rather Than Sell Investment Properties!
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Defer taxes on gain until final sale
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Acquire different type of real estate (rental to commercial) (land to income, etc.)
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Consolidate properties for ease of management
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Pyramid investment holdings by trading up
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Acquire property which is appreciating faster than present holdings
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Spread risk by diversifying from one to several properties
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Dissolve joint ownership (partnership or marriage)
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Acquire property with a positive cash flow (income vs. land)
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Compliment retirement plans, etc.
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* It is highly advisable to discuss these transactions with your attorney, CPA or financial advisor.
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RealtorGuy (707) 391-7757 / (800) 279-0507 ext.15  e-mail
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1031 Tax Deferred Exchanges