What Are 1031 Tax Exchanges?
A tax deferred exchange is very similar to a taxable transaction except that prior to closing on the property being sold, a qualified intermediary, is assigned into the sale contract. The exchange period begins with the transfer of the first property providing the exchanger 45 days to identify, and a total of 180 days to close, on “like-kind” property. The exchange is completed when the intermediary is assigned the purchase and sale contract, utilizes the proceeds received to acquire the replacement property, and instructs the closer to transfer ownership to the exchanger by direct deeding.
