1031 Exchange Requirements
1031 Exchange Requirement
There are four distinct requirements applicable to all 1031 exchanges :
In order to qualify as a 1031 exchange, 100% of the monies earned through the sale of any commercial real estate must be reinvested in the replacement commercial real estate.
Also, the amount of equity held in any like kind commercial real estate for reinvestment must be greater than or equal to that of the relinquished commercial real estate.
Each exchange, including tenancy in common exchanges, requires the use of a Qualified Intermediary to hold all proceeds of the transaction, prepare any paperwork, and answer any technical questions involved with the exchange.
Finally, a 1031 exchange is defined as the exchange of any like kind commercial real estate or commercial real estate for another like kind replacement commercial real estate or commercial real estate. As such, all commercial real estate involved in the exchange must be qualified like kind commercial real estate in order to incur the benefits involved with any 1031 tenancy in common exchange.