Step By Step Guide

Are you ready to start an exchange today?

Step By Step Guide

In order to complete a successful 1031 Exchange, it is important to follow the rules and regulations set forth in the Internal Revenue Code. Gibraltar 1031 Exchange is available to hold our clients’ hand through the entire Exchange process. Contact us anytime should you ever have any questions.

In preparation to complete your 1031 Exchange, here are the steps involved.

A professional and trustworthy Qualified Intermediary is a neutral third party who structures the 1031 Exchange safely and professionally. GB 1031 safely hold the exchange proceeds during the 1031 Exchange transaction and ensures the funds are only utilized for the purchase of the taxpayer’s replacement property(s). GB 1031 also prepares and provides the exchange paperwork necessary to complete the 1031 Exchange.

The exchangor enters into a sales agreement and opens escrow on the relinquished property. Only properties that pass the Qualified Use standard are eligible to be used in a 1031 Exchange.

The taxpayer must enter into an exchange agreement with the Qualified Intermediary prior to the close of their relinquished property. The exchange agreement will outline the terms of the exchange, including the identification of the relinquished and replacement properties, the deadlines for the exchange, and the fees of the Qualified Intermediary.

At the time of close of the relinquished property, the proceeds from the sale will be transferred to the Qualified Intermediary. The exchangor must identify the replacement property they are interested in purchasing within 45 calendar days from the close of the property they sold. The replacement property identified must be like-kind to the relinquished property. The investor must utilize one of the Identification Rules.

The taxpayer has a total of 180 calendar days from the day their relinquish property closes to close on any potential replacement property(s). The proceeds from the sale of the relinquished property will be used to purchase the replacement property.

The taxpayer must file Form 8824 with the IRS in order to report the 1031 Exchange. This form is used to report the details of the exchange to the Internal Revenue Service (IRS) and to calculate any deferred gain or loss from the exchange. Other forms may be required depending on circumstances, consult your tax advisor for additional information.

Your qualified intermediary

Gibraltar 1031 Exchange is available to guide you through the entire exchange process.

contact us