1.800.TIC.1031 | IRS1031.NET

Exchange Requirements

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Exchange Requirement

All 1031 exchanges, including TIC exchanges, must adhere to the following requirements:

The total money reinvested into the like kind commercial property must equal or be greater than the value of the relinquished commercial property. In other words, 100% of the assets from the sale of the first commercial property must be rolled into the second investment.

The amount of equity ( commercial property value minus loan amt. ) of the acquired commercial property must be equal to or greater than that of the commercial property being sold.

Each exchange, including TIC exchanges, requires the use of a Qualified Intermediary to hold all proceeds of the transaction, prepare any paperwork, and answer any technical questions involved with the exchange.

Finally, an exchange is defined as the exchange of any like kind commercial property or commercial properties for another like kind replacement commercial property or commercial properties. As such, all commercial properties involved in the exchange must be qualified like kind commercial properties in order to incur the benefits involved with any 1031 TIC exchange.