One of the major rules in 1031 tax exchange is that the name of the tax payer must appear on the property of which it will be used for identification. The reason being that he is the one who has all the legal documents that are required to verify the property including title deed. As a matter of fact he will be the one to control the property. In some situations we also have companies that are owned by an individual who can also liaise with the property owner to buy the property and act on the full capacity of the property.
Besides, there is also another rule known as replacement rule. One thing with the replacement rule is that it is only functional within one hundred and eighty days after closing of the first property. According to them the closing of the first property and the extension of the exchanger's return states that the property must be purchased and then replaced with the second property.
Apart from that post closing of the first property can be done within a period of 45 days. It acts as an allowance for the identification of either the accommodator or closing the entity address of the possible replacement of property. Another thing is that the owner of the property will still be allowed 45 days for the submission of the property for sale in situation where the replacement property is packed. For instance, we have three party rule which identifies any three properties regardless of their value. Besides, we also have two hundred percent rule which allows for the identification of four or more property as long as long as it does not pass two hundred percent of what has been sold. Apart from that there is also ninety-five percent exemption rule which give an allowance of ninety-five percent of what is identified to be bought if the value of the item sold exceeds two hundred percent of the property. Know more about 1031 exchange at https://en.wikipedia.org/wiki/Like-kind_exchange.
You can as well talk of trading up. This is a little bit challenging since it requires the net market value and the equity of the property must be equivalent or greater than the replacement property to push forward one hundred percent of the tax on the difference. On the hand the exchange needs to pay the tax on that difference between the market value and equity of the property. This difference is enough to tell you that equity and debt are not same.
The necessities in 1031 exchange at 1031gateway.com cannot be determined immediately due to the fact that there is no hold time. We can talk of finding out whether the first property was acquired immediately before the exchange time or whether it was acquired after the exchange time not forgetting others as well.
You should also know that 1031 exchange at 1031gateway.com is not for personal use but for investment and business property. And this does not allow you to live your resident and shift to another place.