Inreit 1031

Basic Exchange Requirements
To defer capital gains tax in its entirety, the investor must follow the general exchange requirements noted below:

Use a Qualified Intermediary—Throughout the exchange process, a Qualified Intermediary will act as a principal and create a reciprocal trade or exchange, prepare legal documentation, hold exchange proceeds and protect the investor from actual or constructive receipt of the exchange funds (i.e., the investor cannot have the right to receive, pledge, borrow or otherwise receive the benefits of the exchange proceeds).
Identify Potential Replacement Property within 45 Days—Investors must identify in writing potential replacement properties within 45 days from the date the relinquished property was transferred. This is usually done with the Qualified Intermediary on a form provided with the exchange documentation.
Acquire Replacement Property within 180 Days—The acquisition of one or more of the previously identified replacement properties must be completed within 180 days (or the tax filing deadline, whichever occurs earlier) from the date the relinquished property was transferred.
Reinvest Net Proceeds—All net proceeds or net equity received and held by the Qualified Intermediary from the relinquished property sale must be reinvested for full tax deferral.
Replace Debt—Any debt paid off or assumed by the buyer in connection with the transfer of the relinquished property must be offset with new or assumed debt used to acquire the replacement property. Alternatively, the investor may contribute additional cash from other sources to offset the debt the investor was relieved of upon the transfer of the relinquished property.