1031 Exchange Agreement Form For Deed In Virginia
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A Qualified Intermediary, or QI, is an independent third party to the transaction whose function is to prepare the documents necessary to create the exchange, as well as to act as the independent escrow agent for the exchange funds.
If during the current tax year you transferred property to another party in a like-kind exchange, you must file Form 8824 with your tax return for that year. Also file Form 8824 for the 2 years following the year of a related party exchange. See Line 7, later, for details. Section 1031 regulations.
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.
The property must be a business or investment property, which means that it can't be personal property. Your home won't qualify for a 1031 exchange. However, a single-family rental property that you own could be exchanged for commercial rental property.
Here are examples of properties ineligible for a 1031 exchange: Primary residences: A 1031 exchange is specifically intended for investment or business properties. Personal properties are not eligible. Vacation homes: Vacation homes generally do not qualify if used for personal reasons.
Under IRC §1031, the following properties do not qualify for tax-deferred exchange treatment: Stock in trade or other property held primarily for sale (i.e. property held by a developer, “flipper” or other dealer) Securities or other evidences of indebtedness or interest. Stocks, bonds, or notes.
Understanding 1031 Exchange in Virginia Properties: Must be like-kind and used for productive purposes in business or investment. Timing: Replacement property must be identified within 45 days, and the acquisition must be completed within 180 days of the sale of the first property.
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.