The 1031 Exchange allows you to postpone paying taxes on the sale of a commercial property. This is done by purchasing a similar property within a specified period. This can potentially save you a significant amount of money. It is crucial to meet two important deadlines to qualify for this tax deferment.

When you sell your property, you must choose a new one within 45 days and tell a middleman in writing. You may identify up to three potential replacement properties, but must complete the purchase of at least one.

Pick more than one property? Buy one within 180 days of selling your commercial property. It is important to adhere to these deadlines to successfully complete a property exchange.

• Once the sale of your property is completed, the countdown for both deadlines starts at the same time.
• You can exchange as many times as you want without limit. You only need to pay taxes on the last sale you want to cash-out on. If your debt goes down during the exchange, it counts as income and you have to pay taxes on it. The same goes for any extra cash you have left over.