Updated 12/1/2023

If you have clients that buy and sell rental properties, they may be interested in utilizing a Section 1031 exchange. However, the rules surrounding Section 1031 exchanges are quite complicated, and clients may not know where to start.

Using this guide, you will be able to quickly determine if your client may be eligible to implement a Section 1031 exchange for the sale and purchase of their rental properties.

This flowchart covers the important criteria a client needs to consider when determining if they can implement a Section 1031 exchange, such as:

• The importance of using a Qualified Intermediary (QI) to help facilitate the Section 1031 exchange process.
• Whether the client meets the appropriate ownership requirements and holding periods.
• Understanding the important deadlines requirements for identifying and purchasing their replacement properties.
• Determining whether the exchange will be a partial or full 1031 exchange, and how “boot” can affect their situation.
• Other miscellaneous factors that are important to consider (e.g., related party transactions, reverse exchanges, etc.).