If you want to venture into the real property, there are several rules about 1031 exchange that you need to know. One of the things you need to do as a first time investor in this sector is to look for a professional who will take you through everything that is needed of you by the law. You do not have to make mistakes here because a mistake will mean a major loss on your side. The 1031 exchange usually helps real estate investors in re-investing their property back for exchange with old properties. In anything that you want to venture in, there is the need to have good knowledge and that is what the code rule helps you in. The following are some of the things you need to know about the 1031 exchange code.
It is important for you to know that there will never be one single property for exchange. Another important thing is that you can never use your house as a property of exchange. It is important that you get to hire a real estate advocate to assist you in all the legal matters. In case you feel that you don’t need a lawyer, you can also choose a qualified middleman to ease the challenge that comes with meeting the requirements of the rule.
Another important rule as per 1031 code is the one known as the 45-day rule. What you need to know about this rule is that you only got 45 days to since the day of classification to see the property that you need to buy. It, therefore, calls for a responsible person who will be able to follow rules to the letter. What you need to do is use the days provided to make a good search for the best property that you can buy with that amount of money. There is the need to take your precious time and see that you get the best out of the transaction. A lot of caution is required if you want to be indeed successful.
The other thing that you need to know is the 180 day rule. In this rule, you are required to have the whole transaction completed within the given time frame. This time will at no time be added to fit any of your situation and you therefore have to make good use of it. For you to get a complimentary tax treatment, you need to make sure that you adhere to this rule. It is important that you also know that if the last day is on Sunday, you will not get any extra day. You have to be careful when you are making your plans of this strict rule.