1031 Exchange

What is a 1031 Exchange?

The 1031 exchange rule allows a real estate investor to sell his commercial property and roll the profits into a “like-kind” exchange property without paying capital gains tax on the real estate investment sale. Some of the major rules and requirements of a 1031 exchange are:

  • Seller must identify a similar “like-kind” exchange property within 45 days of closing on the real estate investment property. The “like-kind” definitions are broad, but do limit your options.
  • A 1031 exchange property must be closed on within 180 days of closing on the real estate investment property.
  • The price of the 1031 exchange property must be equal to or greater than the relinquished property.
  • The same taxpayer who sells the property must buy the property.

How can National Restaurant Properties Help With a 1031 Exchange?

Using an experienced commercial broker can improve the performance of the real estate investment. We are able to help identify potential properties quickly while maximizing net operating income (NOI). The rules of 1031 exchanges are constantly changing and overwhelming. We always suggest you also consult a 1031 tax exchange attorney in order to properly execute it – if you don’t have one, we can recommend a local option.