Choose the strategy
that fits your exchange.

What it is

A forward or delayed exchange is the most common 1031 structure. The investor sells the relinquished property first and later acquires qualifying replacement property.

When it may be useful

Useful when the owner expects to sell before acquiring the replacement property.

How it generally works

• Relinquished property is sold.
• Exchange proceeds are held through the appropriate qualified intermediary structure.
• Replacement property is identified within the applicable identification period.
• Replacement property is acquired within the applicable exchange period.

Key considerations

• Day 45 — Identification
• Day 180 — Completion

1031x can help with

What it is

A reverse exchange is used when the investor needs to acquire the replacement property before the relinquished property has been sold.

When it may be useful

Useful when a desirable replacement property becomes available before the investor is ready or able to complete the sale of the existing property.

How it generally works

The replacement property or relinquished property may need to be temporarily held under an appropriate exchange accommodation structure.

Key considerations

Reverse exchanges are more complex than standard delayed exchanges and generally require specialized professional coordination.

1031x can help with

What it is

An improvement exchange can allow exchange proceeds to be used within the exchange structure for qualifying improvements or construction on the replacement property.

When it may be useful

Useful when the investor finds a replacement property that requires construction, renovation, or other improvements to better meet the exchange objectives.

How it generally works

The replacement property is typically held under an appropriate accommodation structure while exchange-funded improvements are completed during the permitted exchange period.

Key considerations

• Timing is critical.
• Improvements must generally be completed within the applicable exchange period to count toward the exchange value.
• Specialized QI / accommodation coordination is typically required.

1031x can help with

What it is

A simultaneous exchange occurs when the relinquished property and replacement property close at approximately the same time.

When it may be useful

Useful when both transactions are fully coordinated and can close together.

Key considerations

Although conceptually simple, transaction coordination can be demanding.

1031x can help with

What it is

An investor may exchange one relinquished property into multiple replacement properties.

Why clients use it

• Diversification
• Geographic diversification
• Asset-class diversification
• Dividing a large exchange into multiple acquisitions
• Building a portfolio rather than acquiring one replacement asset

1031x advantage

This is an important X-Match™ use case — build a replacement portfolio instead of hunting for a single asset.

1031x can help with

What it is

An investor may sell multiple qualifying properties and seek to consolidate the exchange capital into one larger replacement property.

When it may be useful

• Simplify portfolio management
• Consolidate equity
• Move into larger institutional assets
• Reduce number of properties managed

1031x can help with

What it is

A commonly used identification approach in a delayed exchange: up to three replacement properties may be identified within the identification period, without regard to their aggregate fair market value.

When it may be useful

Useful when the investor has a focused shortlist and wants flexibility on value.

1031x can help with

What it is

An identification approach that may be useful when the investor wants more replacement options than the three-property approach allows, provided the aggregate identified value stays within the applicable threshold.

Key considerations

Aggregate identified value should be monitored closely as properties are added to the list.

1031x can help with

What it is

A specialized rule that may apply when the identified property list exceeds other identification limits, subject to specific acquisition requirements.

Key considerations

This is not a default approach. Professional review strongly recommended.

1031x can help with

What it is

Certain dwelling units used as investment property may potentially qualify for 1031 treatment when applicable requirements are met.

Important distinction

Personal-use property generally does not receive the same treatment as qualifying investment or business real property.

Property Use Analyzer

• Was the property rented?
• How long was it held?
• How many days was it personally used?
• How many days was it rented?
• Is the replacement property intended to be held for investment?

1031x can help with

What it is

Related-party exchanges involve additional restrictions and anti-abuse rules. 1031x.Ai does not determine whether a proposed related-party transaction qualifies.

Key considerations

Professional review is required before proceeding with any related-party structure.

1031x can help with

What it is

A transaction does not necessarily have to result in complete tax deferral. An investor may receive cash or other non-like-kind value, or may not fully replace the value or equity involved in the relinquished property.

Why clients may consider it

• Investor wants to retain some cash
• Replacement property is less expensive
• Investor does not want to reinvest all proceeds
• Strategic liquidity need

Partial Exchange Analyzer

• Sale proceeds
• Exchange amount
• Cash retained
• Estimated taxable portion
• Estimated deferred portion

1031x can help with