1.800.TIC.1031 | IRS1031.NET
 

Exchange Rules

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Exchange Rules

When choosing a replacement exchange commercial property for the exchange, the property investor must follow one of the following exchange rules:

  • The Three-Commercial Property Rule - No more than three commercial properties regardless of their market values, may be chosen as potential replacement commercial properties within 45 days of the close of escrow on the relinquished commercial property. Said commercial properties must be acquired within 180 days of the close of escrow on the relinquished commercial property.

  • The 200% Rule - States that, in the event that three or more replacement commercial properties are used, their total market value must not exceed 200% of the value of the commercial property that is being relinquished.

  • The 95% Exception - Finally, in the case that rules 1 and 2 do not apply, the aggregate value of the like kind commercial properties must account for at least 95% of the value of the commercial property being sold in order for the exchange to qualify.

    Contact us for more questions regarding 1031 exchanges and TIC exchanges and we will put you in contact with a specialist in your area.




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