Lightning-Fast Exchange

Wizard

Step 1 of 18

Part 1 of 3: Existing/Relinquished Property

Describe your existing/relinquished property

For a valid 1031 exchange, you must exchange an interest that constitutes real property. Personal property does not qualify for tax deferment. Proper asset identification ensures compliance with IRS regulations and maximizes potential tax advantages.

Describe your existing property

Street Address Address Line 2 City State ZIP Code

Property Type(Required)

1031 exchanges are intended for investment or business properties, not personal use properties. Therefore, residential properties can still qualify but more information is needed – continue on!

Part 1 of 3: Existing/Relinquished Property

Let's Name This Property

Create a unique nickname for your property. This makes it easy to run multiple valuation models for different properties, since the details you enter for each nicknamed property are saved to your account. You can create nicknames for as many properties as you want!

Property Nickname(Required)

Part 1 of 3: Existing/Relinquished Property

How long have you or did you own this property?

For a property to qualify for a 1031 exchange, the IRS requires that both the property you are selling (the relinquished property) and the one you are buying (the replacement property) must have been held for over 12 months for either business use or investment purposes. Properties held just for resale do not qualify. The 12 month holding period shows that the property was held for productive use in a trade or business or for investment, rather than just for resale.

Date of Acquisition:

Year

Month

Day

Part 1 of 3: Existing/Relinquished Property

At what stage of the sales process are you?

After selling your relinquished property in a 1031 exchange, you have 45 days to identify potential replacement properties. Knowing when a property was listed can help you plan ahead to meet this 45-day deadline. Then, from the date you sold the relinquished property, you have 180 days total to complete the purchase of the replacement property. Being aware of when a potential replacement property was listed can help you strategically plan your purchase timeline to meet these strict 1031 exchange deadlines. Call (888) 629-1031 if you have questions

At what stage of the sales process are you?

Property is not yet listed for sale or under contract

Property is listed but not yet under contract

I can anticipate a closing date / property was sold

Anticipated closing date

Year

Month

Day

Part 1 of 3: Existing/Relinquished Property

What is the estimated price/value of the existing property?

To fully defer taxes in a 1031 exchange, the replacement property must be equal or greater in value to the relinquished property sold. If you acquire a replacement property worth less, you may have to pay some taxes on the difference in value, known as "boot". Providing an accurate estimate of your property's value helps our matching algorithm find suitable replacement properties of equal or greater value, so you can avoid boot and defer taxes fully. Learn more about boot in our whitepaper

Estimated price/value of property?(Required)

Does the value include any Tangible Personal Property (TPP) that would transfer on sale?
(Note this data is used for beta testing, TPP calculation coming soon.)

To be eligible for a Section 1031 exchange, ensure that personal property (“Incidental Property”) does not exceed 15% of the FMV (i.e. relinquished property) of the replacement property you're acquiring. Personal property is considered incidental when:
1. It's commonly transferred with the main property in regular commercial deals.
2. Its total fair market value is no more than 15% of the primary property's aggregate fair market value.
3. However, if relinquished exchange proceeds are used to purchase incidental property, this will result in a partial exchange, as deferral is only allowed on real property.

Estimated TPP that would transfer on sale

Tangible personal property ("TPP") will be taxable if relinquished exchange proceeds are used to buy it, as deferral is only allowed on real property. All real estate can still successfully be exchanged.

Part 1 of 3: Existing/Relinquished Property

Have you identified any replacement properties? If so, how many?

Navigating a 1031 exchange involves strict guidelines for identifying potential replacement properties. Here's a breakdown: Clear Identification: Investors can generally identify up to three replacement properties. Each property must be described with precision, typically using exact addresses or legal descriptions, ensuring there's no ambiguity. This is typically provided to the qualified intermediary. There are two exceptions:
The 200% Rule: You can identify more than three properties if their combined fair market value does not surpass 200% of the value of the property you sold.
The 95% Rule: If the total value of identified properties exceeds the 200% limit, you must acquire properties totaling at least 95% of the value of all properties you've identified.

Have you identified any replacement properties? if so, how many?

3 or more

Not Sure

The exchange will fail if none of the three properties previously identified are exchanged. If more than three properties have been identified, you will have to use the 200% or 95% exception.

Part 1 of 3: Existing/Relinquished Property

What is the existing/relinquished property's purpose?

For real estate to qualify for a 1031 exchange, it must be used for business or investment purposes. Examples include an office building, a rental property, raw land held for appreciation, or a rental home. Property used mainly for personal enjoyment typically does not qualify, such as your primary residence or a vacation home you don't rent out. The key requirement is that the main purpose of the property is to generate income or increase in value, not for personal use. [Link to blog post further explaining qualifying property types]. The property must be used for business or investment - not just personal enjoyment.

What is the existing property's purpose?(Required)

Business/Investment Purposes

My Primary residence

Second/Vacation home

Other

The key requirement is that the main purpose of the property is to generate income or increase in value, not for personal use. Click for more info.

To qualify:

24 months of ownership;
Rented out at fair market rents for at least 14 days in the last 2 years; and
Owner used the property not more than 14 days each year or 10% when it was rented out at FMV.

Part 1 of 3: Existing/Relinquished Property

Cost Basis Calculation

When doing a 1031 exchange, it's important to know the cost basis and adjusted basis of both the relinquished and replacement properties. The cost basis is what you originally paid for the property. The adjusted basis is the cost basis plus any capital improvements you made, minus any depreciation you've taken. These basis amounts determine your potential tax liability if you sell the property later without doing another exchange. They also impact the depreciation you can claim on the replacement property. Having accurate basis information ensures you maximize the tax deferral benefits of the exchange and properly calculate depreciation on the new property according to IRS regulations.

Purchase Price(Required)

Capital Improvements

Depreciation Taken

Transactional Fees (sales costs, commissions, exchange fees)

Your Calculated Adjusted Cost Basis

Part 1 of 3: Existing/Relinquished Property

What is the total amount of debt held?

When doing a 1031 exchange, it's important to know how much debt is on the property you are selling (the relinquished property). If the replacement property takes on less debt than the relinquished property, the difference is considered "mortgage boot”, or referred to as debt relief which could be taxed as boot. To defer taxes completely, the replacement property usually needs to assume an equal or greater debt amount compared to the relinquished property. Being aware of the debt on the relinquished property helps ensure you can acquire a replacement property with equal or higher debt, avoiding unexpected taxes from debt relief boot. Tracking the debt amount is key for a smooth 1031 exchange and maximizing tax deferral.

What is the total amount of debt held?

The total debt held is:

I'm not sure

None

The total debt held is

What type of debt is held?

Recourse (most debt is recourse)

Non-Recourse

Part 2 of 3: Replacement Property

What type of property will the replacement property be?

For a 1031 exchange, the replacement property must be "like-kind" to the property you are selling (the relinquished property). This means the replacement property must be similar in purpose or function. For example, you can swap an office building for raw land, since both are real estate investments. The grade or quality of the properties does not matter. However, trading real estate for something completely different, like a piece of artwork, would not qualify as a like-kind exchange. The key is that the replacement property serves a similar purpose or function as the original relinquished property.

Property Type(Required)

Part 2 of 3: Replacement Property

Do you wish to activity manage this replacement property?

Your answer helps inform our proprietary matching system.

Do you wish to activity manage this replacement property?

Yes

I'm not sure

Part 2 of 3: Replacement Property

Are you an "Accredited Investor"?

An accredited investor is an individual or entity that meets specific financial criteria set by the Securities and Exchange Commission (SEC). For individuals, this typically means having a net worth exceeding $1 million (excluding the value of one's primary residence) or having an annual income of at least $200,000 (or $300,000 combined with a spouse) for the last two years with the expectation of the same or higher income in the current year. Entities, like trusts or businesses, may have different criteria based on assets. Being an accredited investor allows access to certain investment opportunities not available to the general public. As such, additional investment opportunities may be recommended based on your answer.

Are you an "Accredited Investor?

Yes

I'm not sure

Part 2 of 3: Replacement Property

What is the anticipated date of purchase?

In a 1031 exchange, once you've sold your relinquished property, you have a total of 180 days to close on the acquisition of your replacement property. This period starts on the sale date of your old property and includes weekends and holidays. It's imperative to adhere to this timeline, as failing to close within the 180 days can invalidate the tax-deferred benefits of the exchange.

What is the anticipated date of purchase?

I have an anticipated closing date:

I'm not sure

Anticipated closing date

Year

Month

Day

Part 2 of 3: Replacement Property

What is the estimated purchase price/value of the
replacement property? (Include add'l costs & commissions)

Gauging the estimated purchase price of the replacement property is key. This estimate helps ensure you reinvest all proceeds from the sale of your relinquished property, maximizing tax deferral benefits. Additionally, understanding this amount aids in securing necessary financing and planning the exchange to be in line with IRS rules, preventing any potential tax liabilities.

Estimated price/value of property (including add'l costs & commissions)(Required)

Part 2 of 3: Replacement Property

What is the total anticipated debt/additional equity that will be held on the replacement property?

When doing a 1031 exchange, it's important to know how much debt is on the property you are selling (the relinquished property). If the replacement property takes on less debt than the relinquished property, the difference is considered "debt relief" which could be taxed as boot. To defer taxes completely, the replacement property usually needs to assume an equal or greater debt amount compared to the relinquished property. Being aware of the debt on the relinquished property helps ensure you can acquire a replacement property with equal or higher debt, avoiding unexpected taxes from debt relief boot. Tracking the debt amount is key for a smooth 1031 exchange and maximizing tax deferral.

What is the total anticipated debt that will be held on the replacement property?

The new debt/additional equity will be:

I'm not sure

None

The total debt held is

What type of debt?

When doing a 1031 exchange, it's important to know how much debt is on the property you are selling (the relinquished property). If the replacement property takes on less debt than the relinquished property, the difference is considered "debt relief" which could be taxed as boot. To defer taxes completely, the replacement property usually needs to assume an equal or greater debt amount compared to the relinquished property. Being aware of the debt on the relinquished property helps ensure you can acquire a replacement property with equal or higher debt, avoiding unexpected taxes from debt relief boot. Tracking the debt amount is key for a smooth 1031 exchange and maximizing tax deferral.

Why type of debt?

Recourse (most debt is recourse)

Non-Recourse

Part 3 of 3: Tax Situation

What is your federal long-term capital gains rate?

Capital gains tax rates for 2024

The table shows U.S. capital gains tax rates for 2024 according to the IRS.

What is your federal long-term capital gains rate?

15%

20% (default)

Other

Percent

Part 3 of 3: Tax Situation

(Beta Testing – State tax calculations coming soon...)

What is your state of residence?

State

1031Max Summary Report

Generated for

Federal Capital Gains Rate %

Depreciation Recapture Rate 25%

Not Utilizing 1031 Exchange

★ Successful 1031 Exchange

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Part 1 of 3: Existing/Relinquished Property

Describe your existing/relinquished property

Part 1 of 3: Existing/Relinquished Property

Let's Name This Property

Part 1 of 3: Existing/Relinquished Property

How long have you or did you own this property?

Part 1 of 3: Existing/Relinquished Property

At what stage of the sales process are you?

Part 1 of 3: Existing/Relinquished Property

What is the estimated price/value of the existing property?

Does the value include any Tangible Personal Property (TPP) that would transfer on sale?(Note this data is used for beta testing, TPP calculation coming soon.)

Part 1 of 3: Existing/Relinquished Property

Have you identified any replacement properties? If so, how many?

Part 1 of 3: Existing/Relinquished Property

What is the existing/relinquished property's purpose?

Part 1 of 3: Existing/Relinquished Property

Cost Basis Calculation

Part 1 of 3: Existing/Relinquished Property

What is the total amount of debt held?

What type of debt is held?

Part 2 of 3: Replacement Property

What type of property will the replacement property be?

Part 2 of 3: Replacement Property

Do you wish to activity manage this replacement property?

Part 2 of 3: Replacement Property

Are you an "Accredited Investor"?

Part 2 of 3: Replacement Property

What is the anticipated date of purchase?

Part 2 of 3: Replacement Property

What is the estimated purchase price/value of thereplacement property? (Include add'l costs & commissions)

Part 2 of 3: Replacement Property

What is the total anticipated debt/additional equity that will be held on the replacement property?

What type of debt?

Part 3 of 3: Tax Situation

What is your federal long-term capital gains rate?

Capital gains tax rates for 2024

The table shows U.S. capital gains tax rates for 2024 according to the IRS.

Part 3 of 3: Tax Situation

What is your state of residence?

1031Max Summary Report

Does the value include any Tangible Personal Property (TPP) that would transfer on sale?
(Note this data is used for beta testing, TPP calculation coming soon.)

What is the estimated purchase price/value of the
replacement property? (Include add'l costs & commissions)