1031 exchange

[Account Closed]

Could someone please explain this to me?

[Bill Exeter]

@Emmanuel Onyemem

You can do what is called a Build-to-Suit 1031 (or construction) Exchange.  The Build-To-Suit Exchange allows you to structure a 1031 Exchange transaction where you can sell your relinquished property and use the proceeds from the sale of your relinquished property to acquire replacement property. It also allows you to use any excess sale proceeds to improve the acquired replacement property as part of your 1031 Exchange transaction.

The proceeds from the sale of your relinquished property that are used toward the acquisition of your replacement property as well as those proceeds that are paid or used for improvements to your replacement property will qualify for tax-deferred exchange treatment provided the transaction is structured properly as a Build-To-Suit Exchange.

Build-To-Suit 1031 Exchanges are structured as either a Forward Exchange or a Reverse Exchange. These are significantly more complicated 1031 Exchange transactions and should only be administered by a Qualified Intermediary that has significant experience and expertise with Build-To-Suit Exchanges. 

The deadlines to complete your Build-To-Suit Exchange are the same as a Forward 1031 Exchange or a Reverse 1031 Exchange transaction, depending on which structure you have chosen to combine with your Build-To-Suit Exchange.

The 45 and 180 calendar day deadlines are the same. You have 45 calendar days to identify the appropriate property, and you have an additional 135 calendar days — for a total of 180 calendar days — to complete your Build-To-Suit 1031 Exchange transaction.