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1031 Starker Exchange Requirements


1031 Starker Exchange Requirement

To fully defer all capital gain taxes, the 1031 starker exchange must meet four 1031 Starker Exchange Requirements:

Reinvest 100% of Proceeds: The value of the 1031 real estate being purchased must be equal to or greater than the value of the investment real estate being sold.

  • Debt on replacement investment real estate is equal to or greater than the debt on the relinquished investment real estate.

  • Third 1031 Starker Exchange Requirement: The third requirement of Section 1031 starker exchanges is that you must use a Qualified Intermediary (QI). The QI prepares the exchange documents, holds the cash proceeds from the sale, and should answer any questions you may have during the exchange.

  • Fourth 1031 Starker Exchange Requirement: Both relinquished and replacement investment real estate must be held for productive use in a trade or business or held for investment and investment real estate must be like-kind. Like-kind refers to the nature of the investment real estate. The IRS definition of Like-Kind is any investment real estate held for productive use in a trade or business or held for investment purposes.

    In order to complete your next 1031 starker exchange or tenant in common exchange, contact us today. We can put you in contact with a specialized 1031 starker advisor at no cost to you.

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