5 Types of 1031 Exchanges

Using 1031 exchanges can provide you with a way to save money on capital gains taxes when you sell a property. By using the money to purchase another property, you can defer taxes. Here are a few of the different types of 1031 exchanges that are available.

1. Simultaneous Exchange

One of the options that you have is a simultaneous exchange. With this type of exchange, the property that you are getting rid of and the property that you are obtaining will be exchanged on the same day.

2. Delayed Exchange

The delayed exchange is a situation in which you sell your property first. Then you find another property later and buy it with the funds from the sale. You have to complete this type of exchange within 180 days after you sell.

3. Build-to-Suit Exchange

With this type of exchange, you can use part of the money that you receive to improve your new property. This can be done when you buy a property that is not as expensive as the property you sold.

4. Reverse Exchange

With the reverse exchange, you buy a property before you sell your property.

5. Personal Property Exchange

With this type of exchange, you can trade personal property that falls into the same category of assets. 

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