Selling With a 1031 Exchange Series
The Selling With a 1031 Exchange Series
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“What is a 1031? How do the deadlines work? Can I exchange my home, out-of-state property or property held in a trust?” This series explains 1031 exchanges in plain language, combining federal tax law with New York practice.
The Basics
| Part | Title | In One Sentence |
|---|---|---|
| Part 1 | What Is a 1031 Exchange? | How much tax it can save, what qualifies and five basic rules |
| Part 2 | How Does the 1031 Timeline Work? | 45 days, 180 days, the tax return trap and identification rules |
| Part 3 | Why You Must Call an Attorney Before You Sell | Constructive receipt, contract terms, choosing an intermediary and common mistakes |
Common Questions
| Part | Title | In One Sentence |
|---|---|---|
| Part 4 | Can I Do a 1031 Exchange on My Home? | Two-family houses, former homes, vacation homes and combining with Section 121 |
| Part 5 | Can I Exchange New York Property for Property in Another State? | Like-kind property, no New York clawback and buying out of state |
| Part 6 | Can a Trust Do a 1031 Exchange? | Revocable trusts, irrevocable trusts and DSTs |
Advanced Topics
| Part | Title | In One Sentence |
|---|---|---|
| Part 7 | What Is “Boot”? Do I Have to Buy a More Expensive Property? | Equal or up, cash boot and mortgage boot |
| Part 8 | Buy First, Sell Later: Reverse and Improvement Exchanges | Accommodation titleholders, the 180-day improvement limit and co-op hurdles |
| Part 9 | 1031 Exchanges for Property Owned by Partners or an LLC | Same taxpayer, the spouses’ LLC trap and drop and swap |
| Part 10 | Exchange Until the End: Passing Property to Your Children | Step-up in basis, estate tax and holding in trust |
Main Laws Referenced in This Series
- Internal Revenue Code Sections 1031, 121 and 1014
- Treasury Regulation §1.1031(k)-1 and related regulations
- IRS Rev. Procs. 2000-37, 2004-51, 2005-14 and 2008-16, and Rev. Rul. 2004-86
- New York Tax Law: income tax, real estate transfer tax and estate tax
Key 2026 Numbers at a Glance
| Item | Rule |
|---|---|
| Identification deadline | Day 45 after the sale closes |
| Exchange deadline | Day 180 or the tax return due date (with extensions), whichever is earlier |
| How many properties to identify | Three; or more than three up to 200% of value; or the 95% rule |
| Intermediary eligibility | Anyone who served as your attorney, accountant, broker or employee in the past two years is disqualified |
| Vacation home safe harbor | Own 24 months; rent at least 14 days a year; personal use no more than 14 days or 10% of rental days |
| Converting a replacement to your home | Must own it 5 years after acquisition before Section 121 applies |
| New York State top income tax rate | 10.9% |
| New York estate tax exclusion | $7.35 million (cliff at $7,717,500) |
| Federal estate tax exemption | $15 million |
Attorney’s perspective
Whether a 1031 exchange succeeds usually depends on what happens before the sale: the contract terms, the qualified intermediary, how title is held and the timeline. We plan with you and your accountant before the property is listed, and handle closings in New York and coordinate those out of state.
For advice about your own situation, call +1 718-218-5805 or schedule a consultation. We meet clients in Flushing and Manhattan, in English or Chinese.
This article is for general information only and is not legal advice. Reading it does not create an attorney-client relationship. For advice about your situation, please contact us.
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