Defer Capital Gains While Reinvesting in Your Next Property
A Delayed 1031 Exchange is the most common type of 1031 Exchange, allowing real estate investors to sell an investment property and acquire a qualifying replacement property while potentially deferring capital gains taxes.
Aspen 1031 provides strategic guidance throughout the exchange process, helping you understand critical deadlines, replacement-property requirements, and the steps necessary to keep your transaction moving forward.
What Is a Delayed 1031 Exchange?
A Delayed 1031 Exchange occurs when the sale of the relinquished property takes place before the purchase of the replacement property. Rather than receiving the sale proceeds directly, the exchange proceeds are held by a qualified intermediary and used toward the acquisition of qualifying replacement property.
Investors generally have 45 days to identify replacement property and 180 days to complete the exchange, subject to applicable tax rules and requirements.
How a Delayed 1031 Exchange Works
1. Sell Your Investment Property
The relinquished property is sold and the exchange proceeds are transferred to the qualified intermediary.
2. Establish Your Exchange
The exchange is structured to meet applicable 1031 Exchange requirements.
3. Identify Replacement Property
You identify qualifying replacement properties within the required identification period.
4. Acquire Your Replacement Property
The exchange proceeds are applied toward the purchase of qualifying replacement property within the applicable exchange period.
Why Consider a Delayed Exchange?
- Potentially defer capital gains taxes
- Keep more investment capital working
- Reinvest proceeds into new real estate
- Pursue properties better aligned with your investment objectives
- Restructure or diversify your real estate portfolio
- Continue building long-term investment wealth
Who Is a Delayed Exchange For?
A Delayed 1031 Exchange may be appropriate for investors who have already identified an opportunity to sell an investment property but need additional time to locate and acquire their next property.
The Aspen Exchange Difference
Connect with Aspen 1031 to discuss your transaction, timeline, and potential exchange strategy.