--- title: Wealthstone Group | Real Estate | 1031 Exchanges description: Leverage tax-deferred 1031 exchanges to enhance your investment portfolio and secure your financial future. image: https://www.wealthstonegroup.com/hubfs/WealthstoneGroup.jpg --- - Client Portal [![Gold-Logo-1](https://www.wealthstonegroup.com/hs-fs/hubfs/Gold-Logo-1.png?width=2000&height=380&name=Gold-Logo-1.png "Gold-Logo-1")](https://www.wealthstonegroup.com/?hsLang=en) [![Wealthstone-logo-gold](https://www.wealthstonegroup.com/hs-fs/hubfs/Gold-Logo-1.png?width=2000&height=380&name=Gold-Logo-1.png "Wealthstone-logo-gold")](https://www.wealthstonegroup.com/?hsLang=en) - [About](https://www.wealthstonegroup.com/about) - [Real Estate](https://www.wealthstonegroup.com/real-estate) - [1031 Exchanges](https://www.wealthstonegroup.com/real-estate/1031-exchanges) - [1033 Exchanges](https://www.wealthstonegroup.com/real-estate/1033-exchanges) - [721 Exchanges](https://www.wealthstonegroup.com/real-estate/721-exchanges) - [Delaware Statutory Trusts](https://www.wealthstonegroup.com/real-estate/delaware-statutory-trusts) - [Qualified Opportunity Zones](https://www.wealthstonegroup.com/real-estate/qualified-opportunity-zones) - [Private Real Estate Investments](https://www.wealthstonegroup.com/real-estate/private-real-estate-investments) - [Wealth Management](https://www.wealthstonegroup.com/services) - [Investment Management](https://www.wealthstonegroup.com/services/investment-management) - [Alternative Investments](https://www.wealthstonegroup.com/services/alternative-investments) - [Retirement Income](https://www.wealthstonegroup.com/services/retirement-income) - [Tax Mitigation](https://www.wealthstonegroup.com/services/tax-mitigation) - [Wealth Preservation](https://www.wealthstonegroup.com/services/wealth-preservation) - [Business Exit Planning & ESOPs](https://www.wealthstonegroup.com/services/business-exit-planning-esops) - Resources - [Insights](https://blog.wealthstonegroup.com/insights) - [Commentary](https://blog.wealthstonegroup.com/commentary) - [Library](https://www.wealthstonegroup.com/library) - [Events](https://blog.wealthstonegroup.com/events) - [Videos](https://www.wealthstonegroup.com/videos) - [Contact](https://www.wealthstonegroup.com/contact) [![View Properties](https://no-cache.hubspot.com/cta/default/44709168/47dd736a-2645-40ed-92a8-f366b8bf509e.png)](https://cta-redirect.hubspot.com/cta/redirect/44709168/47dd736a-2645-40ed-92a8-f366b8bf509e) [Schedule a Call](https://www.wealthstonegroup.com/schedule-a-call?hsLang=en) [![View Properties](https://no-cache.hubspot.com/cta/default/44709168/47dd736a-2645-40ed-92a8-f366b8bf509e.png)](https://cta-redirect.hubspot.com/cta/redirect/44709168/47dd736a-2645-40ed-92a8-f366b8bf509e) [Schedule a Call](https://www.wealthstonegroup.com/schedule-a-call?hsLang=en) - [About](https://www.wealthstonegroup.com/about) - [Real Estate](https://www.wealthstonegroup.com/real-estate) - [1031 Exchanges](https://www.wealthstonegroup.com/real-estate/1031-exchanges) - [1033 Exchanges](https://www.wealthstonegroup.com/real-estate/1033-exchanges) - [721 Exchanges](https://www.wealthstonegroup.com/real-estate/721-exchanges) - [Delaware Statutory Trusts](https://www.wealthstonegroup.com/real-estate/delaware-statutory-trusts) - [Qualified Opportunity Zones](https://www.wealthstonegroup.com/real-estate/qualified-opportunity-zones) - [Private Real Estate Investments](https://www.wealthstonegroup.com/real-estate/private-real-estate-investments) - [Wealth Management](https://www.wealthstonegroup.com/services) - [Investment Management](https://www.wealthstonegroup.com/services/investment-management) - [Alternative Investments](https://www.wealthstonegroup.com/services/alternative-investments) - [Retirement Income](https://www.wealthstonegroup.com/services/retirement-income) - [Tax Mitigation](https://www.wealthstonegroup.com/services/tax-mitigation) - [Wealth Preservation](https://www.wealthstonegroup.com/services/wealth-preservation) - [Business Exit Planning & ESOPs](https://www.wealthstonegroup.com/services/business-exit-planning-esops) - Resources - [Insights](https://blog.wealthstonegroup.com/insights) - [Commentary](https://blog.wealthstonegroup.com/commentary) - [Library](https://www.wealthstonegroup.com/library) - [Events](https://blog.wealthstonegroup.com/events) - [Videos](https://www.wealthstonegroup.com/videos) - [Contact](https://www.wealthstonegroup.com/contact) [![View Properties](https://no-cache.hubspot.com/cta/default/44709168/47dd736a-2645-40ed-92a8-f366b8bf509e.png)](https://cta-redirect.hubspot.com/cta/redirect/44709168/47dd736a-2645-40ed-92a8-f366b8bf509e)[Schedule a Call](https://www.wealthstonegroup.com/schedule-a-call?hsLang=en) Real Estate # 1031 Exchanges #### Discover how to leverage 1031 exchanges to enhance your investment portfolio and secure your financial future. [Scroll](https://www.wealthstonegroup.com/real-estate/1031-exchanges#next) ## Getting to Know 1031 Exchanges The 1031 Exchange, derived from Internal Revenue Code Section 1031, allows an investor or business owner to sell an investment property and defer taxes on their capital gains. This is achieved by reinvesting the proceeds into another “like-kind” property (passive or active ownership) of equal or greater value within 180 days from the closing date, with the help of a qualified intermediary. This strategic financial tool has been in existence since 1921, allowing for the preservation and enhancement of wealth through the deferral of taxes. ## Steps Towards Completing a 1031 Exchange The path toward successful 1031 exchanges includes incorporating and understanding several key steps: 1 #### Prepare Proper planning is key. Consult with financial, tax and real estate advisors early on in the process to organize your financial picture and find replacement property(ies). 2 #### Choose a Qualified Intermediary (QI) Select a reputable QI to hold funds from the sale and transfer them for the replacement property purchase. 3 #### Sell Your Existing Property Include 1031 exchange language in the sales contract and avoid taking possession of the cash proceeds directly. 4 #### Identify Replacement Property Use one of the three identification methods (3-Property Rule, 200% Rule, 95% Rule) within the 45-day identification period. 5 #### Purchase Replacement Property Add 1031 exchange language to the purchase contract and review the closing statement with your tax advisor and QI. 6 #### Report the Exchange Ensure your tax advisor accurately completes IRS Form 8824 and includes it with your tax return for the year you sold your property. ## 180 Day Timeline ### Day 1 Sell your property ### By Day 45 Find a Replacement ### By Day 180 Close on New Property ## 1031 Exchange Investment Options Investors seeking "like-kind" replacement properties for their 1031 exchange have various options. They can choose between actively managed and passively managed investments, as well as full or fractional ownership positions. #### Passive - Delaware Statutory Trusts (DSTs) - Tenants-in-Common (TICs) - 721 Exchange/UPREIT #### Active - Net Leased (NNN) - Direct Ownership ![Wealthstone-Group-1031-Exchange-Guide](https://www.wealthstonegroup.com/hs-fs/hubfs/Wealthstone-1031Exchange.jpg?width=2175&height=2083&name=Wealthstone-1031Exchange.jpg) Download Now ## Your Guide to a 1031 Exchange Unlock the potential of 1031 Exchanges with our expert guide, designed to elevate your real estate investment strategy with insights into tax deferral, portfolio growth, and wealth preservation. ## Dive Deeper Into Our Real Estate Offerings ![Wealthstone-Logo-GoldWhite-2-1](https://www.wealthstonegroup.com/hs-fs/hubfs/Wealthstone-Logo-GoldWhite-2-1.png?width=266&height=266&name=Wealthstone-Logo-GoldWhite-2-1.png) ### 1033 Exchanges Explore the essential guide to leveraging 1033 Exchanges in real estate. Discover how you can defer taxes and enhance your investment strategy. [1033 Exchanges](https://www.wealthstonegroup.com/real-estate/1033-exchanges?hsLang=en) ![Wealthstone-Logo-GoldWhite-2-1](https://www.wealthstonegroup.com/hs-fs/hubfs/Wealthstone-Logo-GoldWhite-2-1.png?width=266&height=266&name=Wealthstone-Logo-GoldWhite-2-1.png) ### Delaware Statutory Trusts Discover how DSTs can transform your investment strategy, offering a blend of flexibility, diversity, and passive income potential. [Delaware Statutory Trusts](https://www.wealthstonegroup.com/real-estate/delaware-statutory-trusts?hsLang=en) ![Wealthstone-Logo-GoldWhite-2-1](https://www.wealthstonegroup.com/hs-fs/hubfs/Wealthstone-Logo-GoldWhite-2-1.png?width=266&height=266&name=Wealthstone-Logo-GoldWhite-2-1.png) ### Qualified Opportunity Zones Discover how you can contribute to America's underserved communities while enjoying significant tax benefits. 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