1031 Exchange Agreement Form For Deed In Illinois
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FAQ
In answering the question about changing the title – or ownership – following a 1031 exchange, the general answer is “no.” The same investment entity must have ownership of the relinquished property, and take ownership (or the title) of the replacement property, or that exchange could be disallowed by the IRS.
A crucial requirement in a 1031 exchange is that the same taxpayer must sell the relinquished property and acquire the replacement asset. However, there are scenarios where a change of ownership can occur in properties involved in a 1031 exchange without invalidating the exchange.
How to Do a 1031 Exchange Choose a qualified intermediary to coordinate the exchange. Sell your current real estate property. You have 45 days to identify potential replacement properties. You have 180 days to close on a replacement property. File IRS Form 8824.
Depreciation recapture: You can convert your replacement property into a principal residence if your 1031 exchange lets you defer recaptured depreciation tax. This applies regardless of how long you have used the property as your primary residence.
You must file either (1) Form PTAX-203 and any required documents with the deed or trust document or (2) an exemption notation on the original deed or trust document at the County Recorder's office within the county where the property is located.
Your 1031 exchange must be reported by completing Form 8824 and filing it along with your federal income tax return. If you completed more than one exchange, a different form must be completed for each exchange. For line-by-line instructions on how to complete form, download the instructions here.