When we talk about 1031 exchanges, we are generally talking about the delayed exchange. Its in a delayed exchange that you need a QI and you get some time to find the replacement property.
Lets have a look at the benefits of this exchange type.
After selling your existing property, you get enough time to find a replacement property. The property can be designated within 45 days. There is also 180 days for closing the property you have designated.
In the conventional exchange, also known as a simultaneous exchange, the properties are exchanged between two parties. But, here you call to sell your property to one party and purchase the replacement property from another.
And of course, this exchange helps you defer capital gains tax during real estate transactions. Make sure to take the support of only qualified intermediary to hold the proceeds from relinquished property.
There is a modified version of delayed exchange known as improvement exchange. In this process, improvement of the replacement property is done for increasing its value. The reconstructions and improvements have to be completed in not more than 180 of selling your old property.
We will keep on updating you about the different aspects of 1031 like-kind exchange. We are also there to support you when you require a replacement property. You can connect with us for DST investments that are eligible for the exchanges.