What qualifies for a 1031 exchange?

U.S. real estate qualifies for a 1031 exchange if it is held for business or investment purposes (e.g., your home doesn’t qualify for a 1031 exchange). The following types of investment property – whether owned fully or partially – will qualify:

does my property qualify?

What other qualifications are there?

Owning a qualifying property is the first step. But there are a few other criteria you must meet to ensure eligibility for your 1031 exchange:

Investor, Not Flipper

1031 exchanges are available to investors, not to people that trade real estate for a living. So long as you aren’t a “flipper” or developer, you will be eligible for a 1031 exchange.

Hold for a Year

There is no hard and fast rule as to the length of time a qualifying property must be held before being sold – the actual measuring stick used by the IRS is a “reasonable time” – but a general guidepost is at least a year.

Hire a Qualified Intermediary

The IRS requires independent parties called Qualified Intermediaries to facilitate 1031 exchanges. Hint, hint – we’re a fairly amazing Qualified Intermediary.

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