One must identify replacement property within 45 days of deed transfer date of relinquished property.
You must close within 180 days of deed transfer date of relinquished property.
Saturdays, Sundays, holidays, etc. will not extend either rule and one must close before the weekend or holiday if end date falls on one of these days.
1031 funds can be used to acquire a second or vacation home for personal use as long as home is placed in a rental pool at market rate.
An exchanger can even use the replacement property for personal use while maintenance work is being done on property
The basic rule regarding amount of use one may have of a second or vacation home bought with 1031 funds is 14 days of personal use or 10% of amount of time property is rented per year, whichever is greater.
Vacant land qualifies and in some states, ‘real estate’ is broadly defined; ie, water rights, mineral rights, leasehold interests……etc.
There is no limit to the value of the property the exchanger can buy as long as no more than three replacement properties have been identified. If more than three, then the 200 percent rule applies. Aggregate value can be no more than 200% or the relinquished property.
Your attorney or CPA with which you have two years of relationship or preparation of tax returns in the previous two years CANNOT be the qualified intermediary taking title temporarily for your exchange. Nor can your real estate agent. Clarity on this issue is vague.
Cash not spent on the replacement property, called boot, can be taxed federally as capital gains and possibly additionally taxed at 25% on the portion depreciated. This is called a recapture tax.
Related parties (family members) can be part of the 1031 sale but must then own the property for two years before selling or exchange becomes invalidated.
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