Customized Planning Before the Clock Starts
A clearer path through your 1031 exchange.
We help real estate investors organize the decisions, replacement property options, and closing coordination required for a properly structured Section 1031 exchange.
KEY FEDERAL DEADLINES
45
days to identify potential replacement property.
180
days to receive replacement property, subject to the tax-return due-date rule.
Deadlines generally begin when the relinquished property transfers. Your qualified intermediary and tax professionals should confirm the requirements for your transaction.
Start With the Transaction—Not a Product
Planning before the sale creates more options.
The strongest strategies are generally developed before closing. Early planning provides time to understand expected proceeds, debt, ownership, income needs, diversification goals, liquidity constraints, and the practical probability of completing each replacement property option on time.
Transaction Facts
Estimate equity, debt, timing, ownership structure, and anticipated closing proceeds.
Investor Objectives
Clarify income, growth, management, diversification, estate-planning, and liquidity priorities.
Property Strategy
Compare direct property, DST, and blended approaches based on fit, risk, and execution.
Closing Coordination
Align the investor, qualified intermediary, tax and legal advisors, lender, sponsor, and closing parties.
The EP1031 Planning Process
A disciplined process from first conversation through closing.
Our role is to help organize the investment and execution decisions—not replace the qualified intermediary, CPA, attorney, lender, or other professionals responsible for their respective functions.
Discovery and transaction review
Review the relinquished property, expected sale terms, current debt, ownership, timing, tax-professional involvement, and exchange objectives.
Replacement property framework
Define the property types, income profile, debt level, geographic exposure, management responsibilities, liquidity limitations, and risk factors appropriate for evaluation.
Property evaluation and comparison
Compare available opportunities using property fundamentals, sponsor experience, financing, fees, projected cash flow, material risks, and the probability of closing within the exchange period.
Identification and documentation coordination
Coordinate investment paperwork and communication while the investor and qualified intermediary complete the formal identification process.
Funding and closing support
Track subscription, financing, escrow, qualified-intermediary, sponsor, and closing requirements through completion of the replacement property acquisition.
Replacement Property Approaches
The right structure depends on the investor and the transaction.
DIRECT OWNERSHIP
Investor-selected real estate
Direct ownership may offer control and flexibility, but it also requires acquisition execution, financing, management, and property-level concentration decisions.
DST INVESTMENTS
Passive fractional ownership
DSTs may provide access to professionally managed real estate and prearranged financing, but they are illiquid securities with sponsor, property, fee, leverage, and market risks.
BLENDED STRATEGY
Multiple replacement properties
A combination of direct real estate and DST interests may help address different income, diversification, debt, timing, and management objectives when appropriate.
Identification Strategy
Know the rules. Build in contingencies.
The replacement property must be identified clearly and in writing within the applicable identification period. Investors should work directly with their qualified intermediary and tax or legal professionals on formal identification and transaction structure.
Three-Property Rule
Identify up to three potential replacement properties without regard to their aggregate fair market value.
200% Rule
Identify any number of properties if their aggregate fair market value does not exceed 200% of the aggregate fair market value of the relinquished property or properties.
95% Rule
Identify more properties without the 200% limitation if the investor ultimately receives at least 95% of the aggregate fair market value identified.
These are general summaries, not tax or legal advice. Additional requirements and exceptions may apply.
Common Planning Questions
Questions investors should address early.
Specific tax consequences and eligibility depend on individual facts. These answers provide general educational context only.
When should planning begin?
Ideally, before the relinquished property closes. Earlier planning creates more time to establish the transaction facts, engage a qualified intermediary, evaluate replacement properties, arrange financing, and build contingency options.
What type of real estate may qualify as like-kind?
Section 1031 generally applies to real property held for productive use in a trade or business or for investment. Like-kind is broadly interpreted for U.S. real property, but property held primarily for sale and personal-use property may not qualify. Tax and legal professionals should evaluate the specific facts.
Does a replacement property need the same property type?
Not necessarily. For example, investment land may potentially be exchanged for another form of qualifying investment real estate. The intended holding purpose, location, transaction structure, and other requirements matter more than matching the same asset class.
What happens if all proceeds are not reinvested?
Cash or other non-like-kind value received may result in recognized gain, often referred to as “boot.” Debt relief and replacement debt can also affect the result. The investor’s tax professional should calculate the specific tax consequences.
Is EP1031 the qualified intermediary?
No. EP1031 helps with exchange planning, replacement property evaluation, investment documentation, and closing coordination. A separate qualified intermediary facilitates the exchange and holds exchange proceeds under the applicable agreements.
Discuss your exchange