What are the rules or restrictions that must be followed when considering a 1031 Exchange?
A. The property that is going to be sold, as well as the one you are going to buy, must be held for productive use in business or trade, or be for investment purposes. The real estate does not need to be the same type. You could, for example, exchange vacant land for a shopping center or an apartment building for townhouses. B. The proceeds from the sale must go through an intermediary and not through the hands of the property owner or one of their agents. They must also be fully reinvested in the replacement property in order to achieve the maximum benefit. C. The replacement property must carry an equal or greater level of debt in order to achieve maximum benefit.
