Rule #1: The IRS will not allow a 1031 exchange on a property that is considered your personal or primary residence. With regard to second home and vacation homes, that is a matter to discuss with your tax professional and I highly recommend you do so. In essence, the 1031 exchange is intended to apply to business and income properties according to the IRS.
Rule #2: Once you have sold your investment property, referred to as the relinquished property, you have just 45 days to close or identify the next replacement property. If you find yourself in a scenario where you cannot close on a replacement property within 45 days of closing the relinquished property, there are another subset of rules that you must be aware of.
These are only just a two rules from the comprehensive FREE report entitled “18 Guidelines and Rules You Should Know When Using a 1031 Tax-Deferred Exchange” that will help you prepare for utilizing and maximizing your gains on the sale of investment property.
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