Get the details on improvement exchanges.
INTRODUCTION
What is an improvement exchange?
In an improvement exchange (sometimes called a construction or build-to-suit exchange), you can use your 1031 exchange funds to make improvements on your replacement investment property. Because the IRS requires that improvements be completed before you take ownership, the property must be held by a third-party Exchange Accommodation Titleholder (EAT) during the process. This structure allows you to reinvest more strategically while still meeting the strict timing and regulatory requirements of a tax-deferred exchange.
HOW IT WORKS
Plan ahead for your improvement exchange.
Identification Period
You must identify the replacement property within 45 days of closing on the relinquished property.
The 45-day identification period is not extended if the 45th day should happen to fall on a Saturday, Sunday or legal holiday.
Exchange and Improvement Period
You must close on your replacement property and complete all improvements by whichever of the following milestones occurs first:
180 days after transfer of your first relinquished property.
The due date of filing your federal income tax return for the year in which you transferred the first relinquished property, including extensions.
TESTIMONIALS
Our customers trust us.
The First American Florida team managed our 1031 exchange that had multiple complexities with unparalleled professionalism, efficiency, quick turnaround, trustworthiness and patience. We could rely on them to guide us through this process every step of the way, which removed a huge burden from us.
Amra from Florida
1031s are not easy, but the Louisiana team at First American made what felt very complicated, much easier. I was so grateful for their help, support and clarity in answering all my questions and getting the 1031 done exactly as required.
Trina from New York
