1031 Exchange FAQs

Frequently Asked Questions

Midland 1031 has answers to the most frequently asked 1031 exchange questions we receive. Take the complication out of your 1031 exchange. If you can’t find the answer to your question, contact Midland 1031 to speak with one of our exchange specialists.

Click here for real estate professional FAQs, intended for realtors, title closing agents, and attorneys.

Will my vacation rental qualify for a 1031 exchange?

How do I calculate my capital gains?

What are the timing rules?

When you say I need to “identify” my replacement property, does that mean that I have to be under contract by the 45th day?

What if I can’t identify any properties by day 45?

What if day 45-day or 180-day deadline falls on a holiday or weekend?

What if I miss the 180-day deadline?

If my exchange falls through, when will I get my money back?

What is the same taxpayer requirement?

I understand that there has to be continuity of the taxpayer. Does that mean that I cannot purchase the replacement property with anyone else?

You mentioned that there must be continuity of taxpayers from start to finish. Will I ever be able to make changes to the taxpayer on the title?

Are there any other benefits to a 1031 exchange besides tax deferment?

When calculating the net selling price, do I get to take my initial investment into consideration? What about expenses or improvements made before selling? Can I pay myself back for those items?

I know that I have to replace the debt on my relinquished property. Does that mean I have to get another loan for the new property?

All of the properties that I see are nowhere near the Net Selling Price of my relinquished property, but they could all use a substantial amount of work. Could I use some of the exchange proceeds to do the work on the property after closing?

I don't plan to live in the replacement property, but I plan to rent it to my son. That still works, right?

What is a Certified Exchange Specialist® (CES®), and what is the importance of one?

What does the verbiage on the contract need to say?

How do I start an exchange?

What is considered investment or business use real estate?

Who is the Qualified Intermediary?