1031 Do's & Don'ts

DO advanced planning for the exchange. Talk to your accountant, attorney, broker, financial planner, lender, and Qualified Intermediary. 

DO NOT miss your 45-day identification and 180-day exchange deadlines, as this will disqualify the entire exchange. Reputable Intermediaries will not act on back-dated or late identifications. 

DO NOT try doing a 1031 exchange yourself using your CPA or attorney to hold title or funds. IRS regulations requires a Qualified Intermediary to properly complete an exchange. Call us for the name of one that operates in your area. 

DO attempt to sell before you purchase. Occasionally, exchangors find the ideal replacement property before a buyer is found for the relinquished property. If this occurs, a "reverse" exchange (buying before selling) may be necessary. This transaction must be accomodated in accordance with Revenue Procedure 2000-37. Exchangors should be aware that reverse exchanges are a more complex transaction that requires necessary advance planning and coordination.

DO NOT dissolve partnerships or change the manner of holding title during the exchange. A change in the Exchangor's legal relationship with the property may jeopardize the exchange.