What may qualify
Section 1031 generally applies to exchanges of real property held for investment or productive business use. Property held primarily for sale does not qualify. Tax deferral depends on the transaction’s structure; it is not a promise of tax elimination. IRS Publication 544 ↗
Two deadlines to coordinate
For a typical deferred exchange, replacement property must be identified in writing within 45 days after transferring the relinquished property. Receipt must occur by the earlier of 180 days after that transfer or the tax-return due date, including extensions, for the transfer year. Identification rules and exceptions require professional review. IRS Form 8824 instructions ↗
Arrange the exchange structure early
Discuss a qualified intermediary before closing. Actual or constructive receipt of sale proceeds can compromise the intended treatment; the IRS describes safe-harbor arrangements for handling funds. IRS exchange guidance ↗
Property research still comes first
- Translate replacement criteria into location, use, income and risk requirements.
- Review lease terms, tenant concentration and rollover exposure.
- Investigate financing, title, environmental and physical-condition issues early.
- Have your tax adviser assess cash received, debt changes, ownership structure and potential taxable amounts.
- Maintain alternatives without assuming every candidate meets identification rules.
Vito can help organize the commercial property search and transaction questions. Your qualified intermediary and tax advisers determine exchange structure and tax treatment.
Educational information, reviewed November 1, 2026. Property-specific conclusions require verified records. Consult your CPA, attorney and lender about your transaction; brokerage analysis is not tax or legal advice.
Discuss replacement criteria ↗