1031 Exchanges
Exchange Types
Alabama 1031 Property Exchange handles all types of 1031 exchanges: simultaneous, forward, reverse, and improvement. No matter how your transaction is structured, we have the experience to handle it correctly and work alongside all involved parties every step of the way.
Forward
You convey your relinquished property and subsequently acquire replacement property.
Reverse
You acquire replacement property before conveying your relinquished property.
Simultaneous
You convey your relinquished property and acquire your replacement property at the same time.
Forward
Exchanges
The most common form of like-kind exchanges
You convey your relinquished property and subsequently acquire replacement property. From the date of your sale, you have 45 days to identify potential replacement properties in a signed written letter delivered to your qualified intermediary, and 180 days to close on your replacement property, or by the due date of your tax return for the year of the sale, whichever comes earlier. Throughout the exchange period, your net sale proceeds are held by the qualified intermediary in a restricted escrow account that you cannot access, pledge, or borrow against.
Useful when you have identified your next acquisition but have not yet sold
You acquire replacement property before conveying your relinquished property. Because section 1031 does not directly authorize this structure, a Qualified Exchange Accommodation Titleholder ("QEAT") holds title to either the replacement or relinquished property while the exchange is completed, so that the taxpayer is treated as having conveyed the relinquished property before acquiring the replacement property. You have 180 days to sell the relinquished property and complete the exchange.
Reverse
Exchanges
Simultaneous
Exchanges
When you can time your sale and purchase to be "back-to-back"
You convey your relinquished property and acquire your replacement property at the same time. We facilitate the transaction by stepping into the middle, executing an exchange agreement with you and accepting assignment of your rights under your sale and purchase contracts, so that you are treated as having conveyed property to and acquired property from the same party.
Improvement
Exchanges
You use exchange proceeds to acquire replacement property and construct improvements on it before taking title. The lot and planned improvements must both be identified within the 45-day window, all funds must be spent on improvements prior to closing, and the replacement property must be acquired before the end of the 180-day exchange period regardless of whether construction is complete.