Prepare Before You Close.
Protect Your Exchange.
A successful 1031 exchange begins long before the closing table. Preparation is essential to ensure compliance with IRS regulations and to prevent operational mistakes that could invalidate the exchange.
Use this readiness checklist to confirm that your exchange is properly structured before the sale of your relinquished property closes.
Before moving forward, verify that the property and transaction qualify for a 1031 exchange.
✓ Property is held for investment or business use (not a primary residence)
✓ Property qualifies as like-kind real property under IRC Section 1031
✓ Intent exists to reinvest proceeds into investment or business property
✓ Ownership structure of the replacement property will match the relinquished property
Maintaining the same taxpayer identity throughout the exchange is critical to preserving eligibility.
A Qualified Intermediary must be engaged before the sale closes. Once closing occurs, it is too late to structure the exchange.
✓ Exchange agreement signed prior to closing
✓ Assignment language prepared for the purchase and sale agreement
✓ Buyer notified of assignment to the Qualified Intermediary
✓ Exchange account instructions confirmed
✓ Sale proceeds will be wired directly to the Qualified Intermediary
Funds must never be received by the exchanger, even temporarily, to avoid constructive receipt.
Understanding the financial structure of the transaction helps prevent unexpected taxable exposure.
✓ Estimated sale price of relinquished property
✓ Estimated mortgage payoff amount
✓ Estimated closing costs and prorations
✓ Estimated net exchange proceeds
✓ Current depreciation schedule
✓ CPA consulted regarding gain and tax exposure
Advance planning ensures the exchanger understands the reinvestment requirements.
Replacement property strategy should be developed before closing.
✓ Identify target purchase price range (equal or greater value recommended)
✓ Confirm reinvestment strategy (3-property rule, 200% rule, etc.)
✓ Lender pre-approval if financing replacement property
✓ Plan for debt replacement requirements
✓ Evaluate timing for the 45-day identification window
Once the relinquished property closes, the identification clock begins immediately.
Any value not reinvested in the exchange may be considered taxable boot.
✓ Plan to reinvest all net proceeds
✓ Plan to replace equal or greater debt
✓ Review escrow prorations that may create taxable boot
✓ Confirm no personal expenses will be paid from exchange funds
Proper planning reduces the risk of unintended taxable gain.
A coordinated professional team helps ensure a smooth exchange.
✓ Qualified Intermediary
✓ Real estate broker
✓ CPA or tax advisor
✓ Escrow officer
✓ Lender (if financing replacement property)
✓ Legal counsel (if needed)
Communication between these parties is essential during the transaction timeline.
1031 exchanges operate on strict statutory timelines.
Day 0 — Sale of relinquished property closes
Day 45 — Identification deadline
Day 180 — Exchange completion deadline
These deadlines cannot be extended, except in federally declared disaster situations.
i1031 is the first Intelligent Exchange Platform built for modern real estate investors.
The platform provides:
• Structured exchange workflows
• Digital property identification and revocation
• Real-time deadline tracking
• Secure coordination with escrow
• AI-assisted exchange guidance
Everything needed to manage a compliant exchange exists inside one intelligent platform.
Open your exchange with i1031 — The Intelligent Exchange Platform.
Built for speed.
Built for stability.
Built for scale.
i1031 is a modern Qualified Intermediary that provides a secure and organized intelligent platform for 1031 exchanges combining institutional banking with compliance focused processes and real time visibility.
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