Exchange Rules
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 Property Rule - This rule allows the exchanger to identify up to a total of 3 potential replacement commercial properties within the Acquisition Period.
The 200% Rule - States that, in the even that three or more like kind commercial properties are selected in the transaction, their aggregate value must not exceed 200% of the value of the commercial property that is being relinquished.
The 95% Exception - Stipulates that the aggregate value of any and all like kind replacement commercial properties must account for at least 95% of the value of the relinquished commercial property in order for the exchange to qualify. This rule will apply only if rules 1 and 2 do not apply to the specific situation.
Contact us for a free consultation with a 1031 broker regarding all upcoming 1031 TIC exchange opportunities.