There is no argument that the IRS is quite strict when it comes to applying the rules governing 1031 exchanges. Every year, hundreds of proposed exchanges fail because the investor fails to meet one of the requirements set forth in the code.
One of the biggest areas where mistakes are made? Identifying the replacement property.
To make sure you don’t make a misstep here and jeopardize your next exchange, we offer our top tips for identification. When you understand all the requirements of identifying replacement property, you are far less likely to jeopardize your planned exchange.
3 Property Rule – There are different rules that set forth how many possible replacement properties may be identified by an investor, but most follow this rule. It allows an investor to identify up to three replacement properties and eventually acquire, one, two or all three of them.
200% Rule – An investor can … Read More