A 1031 Exchange is used to define a real estate transaction that qualifies under Section 1031 of the United States Internal Revenue Code that allows a taxpayer to defer recognition of capital gains and related federal income tax liability on the exchange of certain types of property, a process known as a 1031 exchange.
A 1031 Exchange involves two more more transactions in which the proceeds from a sale of the first transaction are used in a subsequent real estate purchase. Because a 031 Exchange can occur with either the selling side, buying side or both sides of the transaction, Title I Pipe™ allows the buy side and/or sell side transaction participants to indicate in their accommodations that their side of the transaction qualifies as a 1031 Exchange. If the 1031 Exchange option is selected in the transaction details and the icon will appear as an accommodation associated with the transaction.
The 1031 Exchange icon will include a "B", "S" or both to indicate which side of the transaction the 1031 Exchange applies. In addition, when the 1031 Exchange accommodation is selected, the user will be provided with the option to document the property address of the related transaction.
Title | Pipe™ allows for Qualified Intermediaries to be invited and join a transaction in the same manner as other transaction participants. Qualified Intermediaries can quickly and easily share the relevant 1031 Exchange details with the appropriate transaction participants.
If you are unsure whether your transaction qualifies as a 1031 Exchange you will need to contact your Escrow Officer/Settlement Agent to see if your whether your transaction meets the requirements for a 1031 Exchange.