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Exchange RequirementsReinvest 100% of proceeds:The value of the investment commercial property being purchased must be equal to or greater than the value of the commercial property being sold.
The equity ( commercial property value minus loan balance) in the new commercial property must also be equal to or greater than the equity in the old commercial property. In other words, the loan amount on the new commercial property must be equal to or greater than the loan amount on the commercial property being sold.
Third Exchange Requirement: exchangers must use a Qualified Intermediary in order to hold all proceeds and maintain the integrity of the exchange. It is worthy to note that this person is NOT allowed to give any legal or investment advice during the transaction.
Fourth Exchange Requirement: exchanged commercial properties must be like kind commercial properties, as defined by the IRS. Any Like-Kind commercial property is one which is held for productive use in a trade or business or held for investment purposes.
So many 1031 exchanges into TIC ownership are so successful because they are facilitated by a 1031 broker. Contact us today to complete your exchange.
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