What property qualifies for a 1031 exchange?

Instead, it implies a broad range of real estate qualifies as long as it’s held for productive use in a trade, business or investment. Investment or business property only. Personal residences don’t qualify for a 1031 exchange. The subject properties must be held for investment or used in a trade or business. Greater or equal value.

What is a 1031 exchange?

Instead of immediately paying capital gains on the sale of a property (the “down leg”), many investors prefer to defer that payment by purchasing a new property (the “up leg”) with the proceeds. This is commonly referred to as a 1031 exchange, in reference to the section of U.S. tax code that defines it.

Is DST a 1031 exchange?

The IRS considers DST as real estate property that is eligible for replacement property status as part of a 1031 exchange. But be sure to identify that trust within 45 days of closing on your relinquished property and be sure to be fully invested in the DST within 180 days of your relinquished property closing. Hang on to the cash.