Rental property, bare land or vacation homes are examples of investment property. From the date of closing on the sale of your old property, you have 45 days to come up with a list of properties you would like to buy. Also, from the date of closing, you have 180 days to close the purchase of whatever you are buying. And what you buy must be included on your 45-day list. You can not touch the money.
Title has to stay the same.
Whoever held title to the old property has to end up as the titleholder of the new property. You have to reinvest all of your cash, and your new property has to be at least equal to the net sales price of the old property. If not, you pay tax on the difference. Follow these simple rules and you can enjoy one of the last loopholes in the tax code. Co. Gary now spends all of his time handling 1031 exchanges for his clients and is a frequent writer and lecturer on 1031 issues.