Your full service qualified
1031 exchange intermediary

Exceptional
service starts
with a conversation

hero-mobi
hero-dt

HUB 1031 Inc.

We are a qualified intermediary that offers our clients the expertise with fast, accurate and dependable service needed to complete a successful exchange.

1031 Exchanges are a process of real estate transactions contingent upon adherence to strict provisions and deadlines requiring significant real estate experience. Our staff of experienced and trained specialists has substantial real estate experience and the capability to handle even the most complex transactions.

Why consider 1031 exchange?

Prev
Next
arrow-left
arrow-right

Maintaining equity

Property that is sold or transferred for gain can be subject to taxation. A properly executed exchange offers investors the opportunity to hold onto their equity without being subject to heavy capital gains taxes.

Investment diversification

A 1031 exchange provides an investor with the opportunity to diversify his or her investments regionally and characteristically. An apartment building in Los Angeles, for example, can be exchanged for an investment condo in Portland, Oregon and a small shopping strip-mall in New York, New York.

Estate planning

A common challenge among family members who inherit a large piece of real estate is agreeing on what to do with the property over time. A 1031 exchange provides family members with the opportunity to acquire several properties in exchange for one large property enabling each family member to realize his or her individual investment objective.

Property management

Active investors may amass several diversified investment properties over a period of many years. Managing and maintaining a group of properties can become cumbersome. Through a 1031 exchange, a far-reaching group of properties can be exchanged for a single property with an onsite manager thus making management and oversight a much easier process.

Types of exchanges

There are several 1031 exchange approaches available depending on your goal and situation.

Simultaneous
Exchange

Simultaneous exchange

In a simultaneous exchange, the relinquished property is sold, and the replacement property acquired on the same day, with concurrent closings. The simultaneous exchange is rare, and investors should still use an Exchange Accommodator when doing a simultaneous exchange.

Reverse
Exchange
Delayed
Exchange
Build-to-suit
Exchange

The exchange process in 5 easy steps

Prev
Next
arrow-left
arrow-right

Partner with a qualified intermediary (1031 exchange accommodator)

Employing a Qualified Intermediary is necessary in accordance with the tax code section 1031 that states taxpayer must assign interest as seller of relinquished property to Qualified Intermediary who will hold proceeds until the replacement property(s) is/are purchased.

Include exchange clause as an addendum to the contract

It is important to include language in the contract for both the sale and replacement properties. This is standard in the transaction process and clearly communicates to the other party that you are completing a 1031 exchange and that there are no costs or delays to them in the transaction.

Example:

buyer (or seller) hereby acknowledged that seller (or buyer) intends to conduct an irc 1031 tax deferred exchange which will not delay the closing or cause additional expenses to the seller (or buyer).

Sale property closes and net proceeds deposited with qualified intermediary

As part of the exchange amendment to Escrow Instructions, the Escrow/Title company is instructed to directly deed the property from Exchanger to Buyer.

45 day identification period

Exchanger must notify Exchange Accommodator in writing of potential replacement properties by the 45th day after the sale of the relinquished property. This form will be provided at the closing of the sale.There are three Rules of Identification: (Exchanger must fall under only one of the following)

I. Three Property Rule: Exchanger identifies one, two, or three properties of any combined value and purchases one, two or three as the replacement.

II. Two Hundred Percent Rule: Exchanger identifies as many properties as they wish as long as the total sum of the properties does not exceed 200% of the Total Sales Price of the relinquished property.

III. Ninety-Five Percent Rule: Exchanger identifies as many properties as they wish as long as the exchanger purchases 95% of the total value of all the properties.

Replacement property acquired

ETo ensure full tax deference, all proceeds from the relinquished property must be invested into the replacement property. Exchanger must make certain the debt replaced/assumed on the replacement property is equal to or greater than the debt relieved of from the sale. Closing of all replacement properties must occur within 180 days of the closing date on the relinquished property, or by your tax return due date if before 180 days (Please speak with your tax-preparer in regards to this matter)

FAQ

What is like kind property?

What is like kind property?

IRC §1031 states that the relinquished and replacement property must be of “like-kind.” With respect to a 1031 exchange of real estate, all real property is like-kind. As long as the property is being used for investment and income purposes, and not as a primary residence, it can be exchanged.

Here are the types of property which the IRC recognizes to be of like-kind in nature:

Single Family Rentals / Farms & Ranches / Office / Commercial / Retail / Motels /Hotels / Some Recreational Properties / Multi-Family Rentals / Raw Land / Industrial / Leasehold interest of 30 years or more

Are there deadline extensions?
Can I live in the property after?
How long must I hold the property?
How do I calculate the gain?
Is it too late to do an exchange?
What does not qualify for an exchange?
What else do I have to do?

Free Consultation

HUB 1031 Inc. Premium Exchange Services
2100 Pacific Coast Highway
Hermosa Beach, CA 90254

8:30 am to 5:30 pm Monday through Friday.
We are also available for weekend appointments.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.