1031 Exchange Qualified Intermediary From one closingto the next.
onezero3one facilitates 1031 exchanges for owners of investment and business real estate.
01 The exchange
One independent party holds the exchange together, closing to closing.
In a 1031 exchange, an owner sells investment or business real estate and acquires replacement property without taking possession of the sale proceeds in between. The qualified intermediary is the independent party that holds the exchange together from one closing to the next.
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01
Before the sale closes
onezero3one is assigned into the sale contract and prepares the exchange agreement and closing instructions for the closing agent.
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02
Between sale and purchase
Sale proceeds are paid to onezero3one rather than to the owner and are held for the exchange until they are needed for the purchase.
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03
Identification and purchase
The owner identifies replacement property in writing within 45 days of the sale and completes the purchase within 180 days. onezero3one delivers the exchange funds to that closing.
02 The clock
Forty-five days. One hundred eighty. Calendar days.
Both periods start the day the property you are selling closes, and they run at the same time. Weekends and holidays count.
Today’s date is filled in. Change it to your closing date; nothing you enter leaves your browser.
Day 45 · Identification
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Signed written identification sent to a permitted recipient, usually the qualified intermediary, by midnight.
Day 180 · Exchange
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The replacement purchase must close by midnight.
The 45-day and 180-day periods are fixed by federal law and can be shorter in some circumstances: the exchange period ends earlier if your tax return for the year of the sale, including extensions, is due first. They can be postponed only under IRS disaster or combat-zone relief. Open the full calculator for that check and calendar reminders, or see Disclosures.
03 Full disclosure
What we do, and what we don’t.
onezero3one does
- Take assignment of the sale contract before the sale closes.
- Prepare the exchange agreement and closing instructions for your closing agent.
- Receive the sale proceeds in place of the owner and hold them for the exchange.
- Deliver the exchange funds to the closing of the replacement property.
- Work alongside your tax advisor, your attorney and your closing agent.
onezero3one does not
- Give tax or legal advice. Whether an exchange fits your situation, and how the deadlines apply to you, are questions for your tax advisor or attorney.
- Determine or extend the 45-day and 180-day deadlines. They are set by federal law.
- Act without a written exchange agreement. Qualified intermediary services are provided only under one.
04 What qualifies
Real property held for investment or business, exchanged for the same.
Since 2018, section 1031 covers real property only. The tax is deferred, not forgiven: the gain carries into the replacement property through a lower basis.
Generally qualifies
- Rental houses and apartment buildings
- Office, retail and industrial property
- Land held for investment
- Real estate used in a trade or business
Does not qualify
- Your primary residence
- Property held for sale, such as a fix-and-flip
- Personal property and inventory
05 Tools & guides
Know your numbers before the sale.
Three calculators for the questions that come up before every sale, and plain-language guides to the rules that govern an exchange. They are for orientation; the numbers and the deadlines that apply to you are confirmed with your tax advisor and in the exchange agreement.
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Calculator 01
45 and 180-day deadlines
Enter the closing date of the property you are selling and see the identification and exchange dates, and whether your tax-return due date cuts the period short.
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Calculator 02
Tax deferred by an exchange
An estimate of the federal, state and net-investment-income tax a sale would trigger, and therefore roughly what a fully reinvested exchange could defer. State treatment varies.
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Calculator 03
Depreciation recapture
How much depreciation a rental has taken, the unrecaptured section 1250 gain a sale would produce, and the tax on it.
The guides
- 01What a 1031 exchange isThe rule, who it is for, and the sequence from sale to purchase.
- 02The 45-day and 180-day deadlinesHow the periods are counted, the return due date, and disaster relief.
- 03The identification rulesThree-property, 200 percent and 95 percent rules; revoking an identification.
- 04What a qualified intermediary doesThe safe harbor, assignment, disqualified persons, and exchange funds.
- 05Boot: cash, debt relief and the equity ruleWhy cash or lower debt makes part of an exchange taxable.
- 06Depreciation recapture in an exchangeThe 25 percent tax on prior depreciation and how basis carries over.
- 07LLCs, partnerships and disregarded entitiesThe same-taxpayer rule, single-member LLCs, and drop-and-swap.
- 08Reverse and improvement exchangesBuying before selling, and building on replacement property.
- 09What happens if an exchange failsMissed deadlines, returned funds, and two-year reporting.
- 10The exchange checklistBefore the sale, during the 45 days, at the purchase, at tax time.
06 Questions
Asked before the sale.
Short answers to the questions owners ask first. The guides go further, with citations.
When does the exchange have to be set up?
Before the sale of the property you are selling closes. The qualified intermediary is assigned into the sale contract and the sale proceeds are paid to it at that closing, so the arrangement has to be in place first. If the closing is imminent and nothing is arranged yet, see last-minute 1031 exchanges.
When do the 45 and 180 days start?
On the day the relinquished property is transferred, which is usually the closing date. Where several properties are sold as part of one exchange, both periods run from the earliest transfer. The two periods run at the same time, not one after the other.
Can I hold the sale proceeds myself until I buy?
No. Under the qualified intermediary safe harbor, the exchanger cannot receive, pledge, borrow against or otherwise benefit from the exchange funds while the exchange is open, with narrow exceptions. That is why the proceeds go to the intermediary instead. What a qualified intermediary does.
Who cannot act as my qualified intermediary?
Certain people are disqualified, including anyone who acted as your agent in the two years before the sale, such as your real estate agent or broker, attorney, accountant or employee, and certain related parties. Routine title insurance, escrow, trust or banking services provided by a title company, escrow company or financial institution, and earlier 1031 exchange services, do not by themselves make someone your agent for this purpose. A related party is still disqualified.
How do I identify replacement property?
In a written document you sign and send by midnight of day 45 to the qualified intermediary or another permitted recipient, describing each property unambiguously. What you may list is limited by the three-property, 200 percent and 95 percent rules. The identification rules.
Does onezero3one give tax advice?
No. onezero3one does not give tax or legal advice. Whether an exchange fits your situation, and how the deadlines apply to you, are questions for your tax advisor or attorney. onezero3one works alongside them and with your closing agent.
Where does onezero3one work?
onezero3one intends to serve owners of investment and business real estate throughout the United States. Some states regulate exchange facilitators, so whether onezero3one can act in a particular exchange depends on the property, the parties and the applicable requirements, and is confirmed before an exchange agreement is signed.
07 Contact
Planning a sale?
The exchange must be set up before the sale closes. Call, or send a short note and onezero3one will reply by email.
- Telephone(844) PRO-1031That is (844) 776-1031. Mon–Fri, 9am–6pm Eastern
- Emailinfo@onezero3one.com