1031 Exchange Information

Thinking of selling? CLICK HERE to find out what your multi-family investment property could sell for in today's market

*The following is for informational purposes. We highly recommend that you consult with a tax professional*

So what is 1031? Generally stated, a 1031 exchange (also called a like-kind exchange or a Starker) is an exchange of one investment asset property for another. Although most exchanges are taxable as sales, if you come within 1031, you’ll either have no tax or limited tax due at the time of the exchange.

Here is the IRS definition: Under Section 1031 of the United States Internal Revenue Code (26 U.S.C. § 1031), a taxpayer may defer recognition of capital gains and related Federal income tax liability on the exchange of certain types of property. In 1979, this treatment was expanded by the courts to include non-simultaneous sale and purchase of real estate, a process sometimes called a Starker exchange.

Requirements for IRC Section 1031 Exchanges

TIMELINE REQUIREMENTS

Measured from when the relinquished property closes, the Exchangor has 45 days to nominate (identify) potential replacement properties and 180 days to acquire the replacement property. The exchange is completed in 180 days, not 45 days plus 180 days.

IDENTIFICATION RULES

As an Exchangor, you are required to provide in writing an “unambiguous description” of the potential replacement property prior to midnight on the 45th day (after the close of the first relinquished property). A legal description or property address will suffice. If you wish to identify or purchase multiple properties, you must follow one of the following guidelines:

Identify up to three properties of any value with the intent of purchasing at least one.
Identify more than three properties with an aggregate value that does not exceed 200% of the market value of the relinquished property.
Identify more than three properties with an aggregate value exceeding 200% of the relinquished property, knowing that 95% of the market value of all properties identified must be acquired.
A submitted purchase agreement is considered a sufficient identification.
Any properties purchased and closed within the 45-day time period qualifies as an identification.

Basic Timeline:

Day 1: You have closed on the sale of your investment property.

Day 45: Deadline for identifying up to three like-kind properties for purchase.

Day 180: Deadline to complete the purchase of the new property(s) in order to qualify for a 1031 Exchange.

You have six months from the day you closed escrow on the sale of your original property to successfully meet the 1031 Exchange requirement for the IRS.

1031 Facilitators in Washington:

IPX 1031

Delaware Statutory Trust Info (preferred vendors):

Newest Puget Sound Area Multifamily Property Listings

2232 S 330th Street, Federal Way $537,500

4 bedroom/2 bath single family home with lower level set up as rentable 2 bedroom/1 bath unit with separate entrance, full kitchen, living space, and laundry all in an in...

1816884 MLS
ACTIVE Status

Courtesy of Windermere Real Estate Co.

Listing courtesy of Windermere Real Estate Co..

1832 -xxxx S 116th Street, Burien $4,050,000

Investor's Opportunity! High end quality 6 townhomes each on it's own parcel. Each unit has a potential of being rented out to two separate tenants with separate access t...

1815862 MLS
ACTIVE Status

Courtesy of Sterling Johnston Real Estate

Listing courtesy of Sterling Johnston Real Estate.

1016 Harvey Road NE, Auburn — Hillmans CD Auburndale $925,000

Excellent Well Maintained Auburn 4-Plex. Downtown setting, minutes to shopping, schools, bus, and freeways! Each unit 2 story Townhome style, 2 bed 1.5 bath, end units ha...

1813166 MLS
ACTIVE Status

Courtesy of Around the Clock Inc.

Listing courtesy of Around the Clock Inc..

3912 Linden Avenue N, Seattle $1,845,000

Located in the highly desirable Fremont, this well-maintained pride of ownership apt consists of three 2/1 units, two 1/1 & one studio. Spacious units w/ functional layou...

1811397 MLS
ACTIVE Status

Courtesy of Lee & Associates Commercial RE

Listing courtesy of Lee & Associates Commercial RE.

3801 Wallingford Ave N, Seattle $1,895,000

Located in Wallingford neighborhood, known for its residential charm & short walk to some of the best restaurants in Seattle. Comfortable living, blocks from the iconic ...

1814820 MLS
ACTIVE Status

Courtesy of Lee & Associates Commercial RE

Listing courtesy of Lee & Associates Commercial RE.

4025 Midvale Avenue N, Seattle $1,250,000

Located in the highly sought-after neighborhood of Wallingford, known for its residential charm and central location. This well-maintained building consists of five 1 bed...

1815234 MLS
ACTIVE Status

Courtesy of Lee & Associates Commercial RE

Listing courtesy of Lee & Associates Commercial RE.

160 Rainier Boulevard S, Issaquah $750,000

Calling all investors! Set in the heart of Olde Towne Issaquah, this charming duplex is in a prime location off of the main arterial, Front Street, which connects shops, ...

1813369 MLS
ACTIVE Status

Courtesy of Windermere Mercer Island

Listing courtesy of Windermere Mercer Island.

39554 SE Park Street, Snoqualmie $720,000

Here is an amazing location triplex in Downtown Snoqualmie! Two units offers 2 Bedroom 1 Bath and one offers a 1 bed 1 bath. All units have 1 outdoor storage space and wa...

1814370 MLS
ACTIVE Status

Courtesy of Blackwell Real Estate LLC

Listing courtesy of Blackwell Real Estate LLC.

9253 51st Avenue S, Seattle — RAINER BEACH ADD $865,000

STABILIZED DUPLEX W/ ADDITIONAL LAND... FINAL PERMITS IN HAND! Renovated duplex w/ stable cash flow AND fully permitted for two townhomes! Located in Opportunity Zone for...

1815335 MLS
ACTIVE Status

Courtesy of L4 Realty

Listing courtesy of L4 Realty.

7438 E Green Lake Dr N, Seattle $2,880,000

Unbeatable location directly across from Green Lake! Not only a duplex but so much more options for investors, multi generational living or primary home with instant ren...

1814263 MLS
ACTIVE Status

Courtesy of John L. Scott, Inc.

Listing courtesy of John L. Scott, Inc..

1210 N 173rd Street, Shoreline — Smith $1,100,000

Rare Shoreline side-by-side 3 bedroom/ 2 bath duplex! Well located within minutes to freeways and shopping on a quiet street. Walkable to Shoreline's wonderful schools an...

1810494 MLS
ACTIVE Status

Courtesy of Madison Avenue Realty

Listing courtesy of Madison Avenue Realty.

2016 S Main Street, Seattle — Hill Tract Add $1,500,000

Excellent triplex in Central Seattle! Walk Score:93 & Bike Score:94 which are Walker's & Biker's Paradise and with excellent Transit Score. Each unit has 2bdms 1.75baths,...

1813675 MLS
ACTIVE Status

Courtesy of Windermere RE/South, Inc.

Listing courtesy of Windermere RE/South, Inc..

2703 S 256 Street Pl, Kent — Western View Estates $845,000

Great investment opportunity, Investor' Dream for a 4-Plex that generate substantial positive cash flow, great Cap Rate. Well maintained Two 2Bedroom/ 1Bath and Two 1Bed...

1813797 MLS
ACTIVE Status

Courtesy of Homeland Real Estate Services

Listing courtesy of Homeland Real Estate Services.

17160 Avondale Way NE, Redmond $4,500,000

The Cascadia Apartments are an updated and incredibly well located 11 unit apartment building across from Bear Creek Village and steps to Redmond Town Center and downtown...

1808281 MLS
ACTIVE Status

Courtesy of Real Property Associates

Listing courtesy of Real Property Associates.

1318 E James Street, Kent $875,000

Single Family with Duplex. Large corner lot with income potential! Zoned Multi Family. Single family 3 bed 2 bath is freshly remodeled. New quartz counter tops, wall to w...

1813640 MLS
ACTIVE Status

Courtesy of Realogics Sotheby's Int'l Rlty

Listing courtesy of Realogics Sotheby's Int'l Rlty.

1832 14th Avenue, Seattle $1,600,000

For Sale: 10 Unit in the heart of Capitol Hill. Part of a portfolio or available to purchase\ individually. 10 units, eight studios and two 1x1's. Rents are below market....

1813945 MLS
ACTIVE Status

Courtesy of Kidder Mathews