- Exchange Timeframe- You have 45 days to identify potential replacement property and a total of 180 days to purchase and close. The exchange timeframe starts the day you close escrow on the relinquished property.
- Extending the Timeframe-The IRS doesn’t grant extensions!!!! The only way to buy more time is to delay the close of escrow on the relinquished property.
- Avoid Boot! Boot is taxable. To avoid boot and defer 100% of the tax liability you’ll need to:
a. Reinvest all the cash and
b. Purchase property equal or greater in value.
- Open the Exchange Account– There is no fee to open an 1031 Exchange account, so as soon as you are in contract, open an account with the Asset Exchange Company. You will only be charged a fee when you close escrow.