What documentation do you need for a 1031 exchange?

A Deed, Bill of Sale, Invoice and or license are required to solidify the transfer of the exchanged properties. A Settlement Statement is required to illustrate the correct amount of funds coming into the exchange as well as proof the funds are appropriately being utilized to acquire the Replacement Property.

What are the steps in a 1031 exchange?

How to do a 1031 exchange

  1. Step 1: Identify the property you want to sell.
  2. Step 2: Identify the property you want to buy.
  3. Step 3: Choose a qualified intermediary.
  4. Step 4: Decide how much of the sale proceeds will go toward the new property.
  5. Step 5: Keep an eye on the calendar.
  6. Step 6: Be careful about where the money is.

Can you do a 1031 exchange without a qualified intermediary?

A successful 1031 exchange isn’t a do-it-yourself project. You must follow IRS rules to realize the tax deferral benefits and you’ll need a middle person, called a qualified intermediary (QI).

Is a 1099 required for a 1031 exchange?

In the beginning of a 1031 deferred exchange, when the closing of the relinquished property occurs, the title company or escrow closing company typically has the responsibility to report the seller/exchangor’s disposition to the IRS on a IRS Form 1099-S.

Who handles all of the 1031 exchange paperwork?

Qualified Intermediaries are responsible for (1) preparing the 1031 exchange legal agreements and related documents; and (2) holding, safeguarding and investing the 1031 exchange funds during the like-kind exchange transaction; and (3) coordinating the overall tax-deferred exchange transaction; and (4) keeping the tax- …

How long does it take to set up a 1031 exchange account?

It can take 5 days, 45 days, or all 180 days. You cannot buy property as part of the exchange that is not on the 45-day identification list. The entire exchange must be completed in 180 days total, not 45 days plus 180 days.

Can I file a 1031 exchange myself?

1. Don’t try to exchange a piece of personal property. 1031 exchanges can only be done between investment properties that you own, which means REITs, funds or an LLC that owns shares in another LLC don’t qualify.

Does the IRS audit 1031 exchanges?

When it comes to IRC §1031 tax deferred exchanges, many taxpayers wonder if performing an exchange increases their chances of an audit. The answer is an unequivocal “no.” Historically, the IRS has not audited investors who perform §1031 exchanges more than any other group of taxpayers.