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1031 Exchange Rules

All 1031 exchanges must comply with at least one of the following three 1031 rules in order to qualify as such:

  • 1) The Three-Commercial Real Estate Rule - This rule allows the exchanger to identify up to a total of 3 potential replacement commercial real estate within the Acquisition Period.

  • The Two Hundred Percent Rule - Stipulates that, if three or more replacement commercial real estate are used in the exchange, their aggregate value must not exceed 200% of the value of the commercial real estate that is being relinquished.

  • The Ninety-five Percent Exception - Finally, if circumstances are such that rules 1 and 2 do not apply, the aggregate value of the like kind replacement commercial real estate must account for at least 95% of the value of the relinquished commercial real estate at the time of sale in order for the exchange to qualify.

    To find out more, contact us and we will put you in touch with a 1031 realtor in your area.