1031 Exchange FAQs
Q. Why would someone want to do a 1031 Exchange?
To defer capital gains tax on the sale of commercial, business, or investment property.
Q. What type of property is not eligible for a 1031 Exchange?
Your residence is not eligible for 1031 treatment. Any other property that is not held for commercial, business, or investment purposes is also not eligible.
Q. How do I start a 1031 Exchange?
You must contact a Qualified Intermediary (see our Strategic Alliance section) before you sell your property, so that you can complete the appropriate documentation and structure the exchange.
Q. Do I have to use a Qualified Intermediary ("QI")?
Using a Qualified Intermediary ("QI") is the most common way to receive 'safe harbor' protection for your 1031 Exchange.
Q. Can't my own attorney or CPA serve as my Qualified Intermediary?
No. A Qualified Intermediary ("QI") must remain completely independent and cannot have been your agent in the past 2 years.
Q. How many potential replacement properties may I identify?