California 1031 Exchange Requirements
In order to incur all the benefits of a
tenants in common exchange, each exchange must satisfy all of the requirements.
First, 100% of the monies earned on the sale of the relinquished california rental property must be reinvested into the second california rental property.
Second, the debt on the like kind replacement california rental property must be equal to or greater than the debt held on the relinquished california rental property.
Third California 1031 Exchange Requirement: The california property owner must not have constructive receipt of the sale proceeds at any time during this exchange period or the money becomes taxable income. Typically, this is accomplished by using a professional exchange facilitator as a middleman to hold the sale proceeds and execute the exchange documents.
Fourth California 1031 Exchange Requirement: Both relinquished and replacement california rental property must be like-kind. As used in IRC 1031(a), the words Like-Kind have reference to the nature or character of the california rental property and not to its grade or quality. One kind of class of california rental property may not, under that section, be exchanged for california rental property of a different kind or class.
Contact us today to be put in touch with a qualified california 1031 broker for your next california 1031 exchange.