Follow these steps to do a 1031 exchange: Identify the property you want to sell. This must be an investment property—not a primary residence—and it should ideally have appreciated in value since you purchased it to take full advantage of the tax deferment benefits of a 1031 exchange. Engage a qualified intermediary.
How do I qualify for a section 1031 exchange?
To qualify as a Section 1031 exchange, a deferred exchange must be distinguished from the case of a taxpayer simply selling one property and using the proceeds to purchase another property (which is a taxable transaction).
Does a 1031 exchange count as a property?
A key rule about 1031 exchanges is that they’re generally only for business or investment properties. Property for personal use, such as your home, or a vacation house, typically doesn’t count.
