If you want to venture into the real property, there are several rules about 1031 exchange that you need to know. When you have a question either about real estate investment or the 1031 exchange, it is required of you to consult with a tax professional. You need to understand what it is all about so that you are able to make the best investment decision. The reason why the 1031 rules are important is that they help the investors to know how to carry out their investment in the best way. It is important that you gain the knowledge about these rules for you to do well in this field. The following are some of the things you need to know about the 1031 exchange code.
The first information that is essential for you to know is that there have to be at least two properties for exchange. Another important thing is that you can never use your house as a property of exchange. The best thing that you can probably do is to hire a real estate lawyer as they will be of great assistance. In case the lawyer is not available, there is also the option of finding a conciliator who will help you in adhering to the rules.
Another important rule as per 1031 code is the one known as the 45-day rule. These days are the one you have to get to see the other property that you want to purchase since the day of sale of your old property. 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. You should not do the selling of your property and hurriedly go to look for another property. When you have this in consideration, it is with no doubt that you will be able to reap benefits.
The other thing that you need to know is the 180 day rule. You need to understand that it will take you 180 says from the day of classification to the final day for the whole exchange to take place. The other thing that you need to know is that these days will at no time be stretched due to your changing needs. It calls for ample preparation and planning so that you are not met and left off guard by this condition. You have to know that the rule applies even in the case of the last day being on the weekend. These are some of the rules that are in the 1031 code that you need to meet as a real estate investor.