--- title: Do I Need an Attorney for a 1031 Exchange? description: Working with a tax attorney on your 1031 exchange ensures you meet filing requirements when pursuing the potential benefits of this wealth management strategy. image: https://www.realized1031.com/hubfs/Images/photo/abstract/house-lawyer-suit-IS-1189048946.jpg --- [![Realized 1031 Exchange Marketplace](https://www.realized1031.com/hs-fs/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black.png?width=240&height=80&name=Realized-Logo-Black.png "Realized 1031 Logo") ](https://www.realized1031.com/) - [Wealth Management Gap](https://www.realized1031.com/the-wealth-management-gap) - [Our Process](https://www.realized1031.com/how-realized-works) - [Financial Advisors](https://www.realized1031.com/advisor) - [Resources](https://www.realized1031.com/resources) - [The Company](https://www.realized1031.com/about-us) - [Articles](https://www.realized1031.com/blog) [Register](https://www.realized1031.com/marketplace) [Log In](https://www.realized1031.com/login) - Better Business Bureau Rating: **A+** - [FINRA BrokerCheck](https://brokercheck.finra.org/firm/summary/22333) - [Call](tel:1-877-797-1031) **(877) 797-1031** # Do I Need an Attorney for a 1031 Exchange? Posted Nov 18, 2021 ![house-lawyer-suit-IS-1189048946](https://www.realized1031.com/hs-fs/hubfs/Images/photo/abstract/house-lawyer-suit-IS-1189048946.jpg?width=750&height=392&name=house-lawyer-suit-IS-1189048946.jpg) Utilizing a 1031 exchange is a way to retain some portion of the money you have earned on an investment property. A 1031 exchange allows you to carry over capital gains from the sale of your investment property and reinvest it into a like-kind real estate opportunity, allowing you to keep more of your funds working to grow your portfolio. While a 1031 exchange can be a useful wealth management strategy, failure to adhere to IRS specifications can disqualify your exchange and result in a burdensome tax liability. The best course of action when considering a 1031 is to work with a professional to help ensure that the transaction is successful. ### What Is a 1031 Exchange? A 1031 exchange, also called a like-kind exchange, is a type of tax filing that allows real estate investors to suspend capital gains taxes when selling an investment property. As part of a [1031 exchange](https://www.realized1031.com/glossary/1031-exchange), the investor must put the proceeds from the sale into like-kind investment property of greater or equal value. According to section 1031 of the Internal Revenue Code (IRC), for a property to [qualify for a 1031 exchange](https://www.irs.gov/newsroom/the-treasury-department-and-irs-issue-final-regulations-regarding-like-kind-exchanges-of-real-property), it must be real property used as an investment, business, or trade. The goal of a 1031 exchange is that it allows you to attempt to grow your wealth as a tax-deferred asset. The IRS puts no limit on how many exchanges you can file, so ideally, you will be able to make several investments to seek to grow your wealth. When you are ready to make a final sale, you will pay one capital gains tax rather than pay on each sale of investment properties during your lifetime. ### When to Consider a 1031 Exchange Several factors determine when a 1031 exchange might be right for you. In our experience, investors who are ready to take advantage of a like-kind exchange are generally: -       Preparing to sell an investment property -       Able and willing to reinvest the proceeds from the sale into like-kind property -       Interested in a long-term, [sophisticated wealth management strategy](https://www.realized1031.com/the-wealth-management-gap) If you agree with these statements, it is appropriate to consider utilizing a 1031 exchange to help build your asset portfolio. ### Should You Hire an Attorney for a 1031 Exchange? As a responsible investor, you understand the importance of meeting the IRS reporting requirements to avoid tax penalties later. 1031 exchanges are heavily regulated, and those who take advantage of their benefits must meet the exact requirements laid out by the IRS to qualify. Working with a tax attorney specializing in like-kind exchanges ensures that you don’t lose out on the benefits of a 1031 and don’t end up with an unexpected tax burden. A tax attorney can verify that you choose the right like-kind property and[ address complex situations](https://www.investopedia.com/financial-edge/0110/10-things-to-know-about-1031-exchanges.aspx), such as a depreciable property exchange, a delayed exchange, or an exchange in which you hold debt on the property you are selling or buying. However, using a tax attorney is not required to execute on a 1031 exchange. ### Explore Your Options for Wealth Management A 1031 exchange can be an essential element of your wealth management strategy. When used correctly, like-kind exchanges are designed to allow you to keep more of the wealth you’ve earned from investment properties working for you. If you are considering selling an investment property, consult with a professional on the tax benefits of using a 1031 exchange. This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation. Costs associated with a 1031 transaction may impact investor’s returns and may outweigh the tax benefits. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities. All real estate investments have the potential to lose value during the life of the investment. Download The Guide To 1031 Exchange [![The 1031 Investor's Guidebook](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/1031-Exchange-eBook-250.png?width=250&height=250&name=1031-Exchange-eBook-250.png "Tackle the art and science of ...") ](https://www.realized1031.com/blog/do-i-need-an-attorney-for-a-1031-exchange#blogform) Download eBook ---   --- ### The 1031 Investor's Guidebook ![Download The Guide To 1031 Exchange](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/1031-Exchange-eBook-550.jpg?width=550&height=650&name=1031-Exchange-eBook-550.jpg) Tackle the art and science of completing your 1031 exchange. By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. To manage receiving emails from Realized visit the Manage Preferences link in any email received. Search ### [Why Realized](https://www.realized1031.com/why-realized) - [Wealth Management](https://www.realized1031.com/the-wealth-management-gap) - [Why Realized](https://www.realized1031.com/why-realized) - [Our Process](https://www.realized1031.com/how-realized-works) - [Scenarios](https://www.realized1031.com/scenarios) - [Private Client Program](https://www.realized1031.com/private-client) - [Realized Exchange Services](https://www.realized1031.com/realized-exchange-services) ### [The Company](https://www.realized1031.com/about-us) - [The Team](https://www.realized1031.com/about-us) - [FAQ](https://www.realized1031.com/frequently-asked-questions) - [Testimonials](https://www.realized1031.com/testimonials) - [Press](https://www.realized1031.com/press) - [Careers](https://www.realized1031.com/careers) ### [Partners](https://www.realized1031.com/partners) - [Financial Advisors](https://www.realized1031.com/advisor) - [Broker Dealers](https://www.realized1031.com/partners/broker-dealers) - [Real Estate Agents](https://www.realized1031.com/partners/real-estate-agents) - [Certified Public Accountants](https://www.realized1031.com/partners/certified-public-accountants) ### [Resources](https://www.realized1031.com/resources) - #### Learn - [Articles](https://www.realized1031.com/blog) - [Glossary of Terms](https://www.realized1031.com/glossary) - [Capital Gains Tax Rates](https://www.realized1031.com/capital-gains-tax-rate) - #### Watch - [Video Library](https://www.realized1031.com/videos) - [Webinar Archive](https://www.realized1031.com/webinars) - #### Read - [Delaware Statutory Trust](https://www.realized1031.com/delaware-statutory-trust) - [Tenants-In-Common](https://www.realized1031.com/tenants-in-common-tic) - [1031 Exchange](https://www.realized1031.com/1031-exchange) - [Qualified Intermediary](https://www.realized1031.com/qualified-intermediary) - [Qualified Opportunity Zones](https://www.realized1031.com/opportunity-zones) #### Realized - 500 W 13th Street Austin, TX 78701 - (877) 797-1031 ##### [Contact Us](https://www.realized1031.com/contact-us) - [![Realized on Facebook](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-facebook-whiterev.png?width=60&height=60&name=social-facebook-whiterev.png)](https://www.facebook.com/Realized/) - [![Realized on LinkedIn](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-linkedin-whiterev.png?width=60&height=60&name=social-linkedin-whiterev.png)](https://www.linkedin.com/company/realized/) - [![Realized on YouTube](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-youtube-whiterev.png?width=60&height=60&name=social-youtube-whiterev.png)](https://www.youtube.com/c/Realized1031?sub_confirmation=1) - [![Realized Holdings, Inc. BBB Business Review](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/bbb/RZH2-bbb-seal.png?width=40&height=65&name=RZH2-bbb-seal.png)](http://www.bbb.org/central-texas/business-reviews/real-estate-investors/realized-holdings-llc-in-austin-tx-1000112948/#bbbonlineclick) - [![FEA Logo](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/fea/RZH2-fea-logo.png?width=82&height=65&name=RZH2-fea-logo.png "FEA Logo")](https://www.1031.org) SECURITIES DISCLOSURE Realized1031.com is a website operated by Realized Technologies, LLC, a wholly owned subsidiary of Realized Holdings, Inc. (“Realized Holdings”). Securities and/or Investment Advisory Services may be offered through Registered Representatives or Investment Advisor Representatives of Realized Financial, Inc. ("Realized"), a broker/dealer, member [FINRA](https://www.finra.org)/[SIPC](https://www.sipc.org/), and registered investment adviser. Realized is a subsidiary of Realized Holdings, Inc. ("Realized Holdings"). Check the background of this firm on [FINRA's BrokerCheck](https://brokercheck.finra.org/firm/summary/22333). Hypothetical example(s) are for illustrative purposes only and are not intended to represent the past or future performance of any specific investment. Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments are often sold by prospectus that discloses all risks, fees, and expenses. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain and should not be deemed a complete investment program. The value of the investment may fall as well as rise and investors may get back less than they invested. This site is published for residents of the United States who are accredited investors only. Registered Representatives and Investment Advisor Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all of services referenced on this site are available in every state and through every representative listed. For additional information, please contact the Realized Compliance department at 512-472-7171 or info@realized1031.com. - [Terms & Conditions](https://www.realized1031.com/terms-and-conditions) - [Privacy Policy](https://www.realized1031.com/privacy-policy) - [Form CRS](https://www.realized1031.com/hubfs/common-files/disclosures/FormCRS.pdf) - [ADV 2A](https://www.realized1031.com/hubfs/common-files/disclosures/ADV2A.pdf) - [Reg BI Disclosures](https://www.realized1031.com/hubfs/common-files/disclosures/RegBI.pdf) -   © 2026 Realized Holdings, Inc. ```json { "@context" : "http://schema.org/", "@type" : "BlogPosting", "articleBody" : "Utilizing a 1031 exchange is a way to retain some portion of the money you have earned on an investment property. A 1031 exchange allows you to carry over capital gains from the sale of your investment property and reinvest it into a like-kind real estate opportunity, allowing you to keep more of your funds working to grow your portfolio. While a 1031 exchange can be a useful wealth management strategy, failure to adhere to IRS specifications can disqualify your exchange and result in a burdensome tax liability. The best course of action when considering a 1031 is to work with a professional to help ensure that the transaction is successful. What Is a 1031 Exchange? A 1031 exchange, also called a like-kind exchange, is a type of tax filing that allows real estate investors to suspend capital gains taxes when selling an investment property. As part of a 1031 exchange, the investor must put the proceeds from the sale into like-kind investment property of greater or equal value. According to section 1031 of the Internal Revenue Code (IRC), for a property to qualify for a 1031 exchange, it must be real property used as an investment, business, or trade. The goal of a 1031 exchange is that it allows you to attempt to grow your wealth as a tax-deferred asset. The IRS puts no limit on how many exchanges you can file, so ideally, you will be able to make several investments to seek to grow your wealth. When you are ready to make a final sale, you will pay one capital gains tax rather than pay on each sale of investment properties during your lifetime. When to Consider a 1031 Exchange Several factors determine when a 1031 exchange might be right for you. In our experience, investors who are ready to take advantage of a like-kind exchange are generally: Preparing to sell an investment property Able and willing to reinvest the proceeds from the sale into like-kind property Interested in a long-term, sophisticated wealth management strategy If you agree with these statements, it is appropriate to consider utilizing a 1031 exchange to help build your asset portfolio. Should You Hire an Attorney for a 1031 Exchange? As a responsible investor, you understand the importance of meeting the IRS reporting requirements to avoid tax penalties later. 1031 exchanges are heavily regulated, and those who take advantage of their benefits must meet the exact requirements laid out by the IRS to qualify. Working with a tax attorney specializing in like-kind exchanges ensures that you don’t lose out on the benefits of a 1031 and don’t end up with an unexpected tax burden. A tax attorney can verify that you choose the right like-kind property and address complex situations, such as a depreciable property exchange, a delayed exchange, or an exchange in which you hold debt on the property you are selling or buying. However, using a tax attorney is not required to execute on a 1031 exchange. Explore Your Options for Wealth Management A 1031 exchange can be an essential element of your wealth management strategy. When used correctly, like-kind exchanges are designed to allow you to keep more of the wealth you’ve earned from investment properties working for you. If you are considering selling an investment property, consult with a professional on the tax benefits of using a 1031 exchange. This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation. Costs associated with a 1031 transaction may impact investor’s returns and may outweigh the tax benefits. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities. All real estate investments have the potential to lose value during the life of the investment.", "articleSection" : [ "1031 Exchange" ], "author" : { "@type" : "Person", "email" : "marketing@realized1031.com", "image" : "", "name" : "The Realized Team", "url" : "https://www.realized1031.com/blog/author/the-realized-team" }, "dateModified" : "2021-11-18T13:00:02+0000", "datePublished" : "2021-11-18T13:00:01+0000", "description" : "Working with a tax attorney on your 1031 exchange ensures you meet filing requirements when pursuing the potential benefits of this wealth management strategy.", "headline" : "Do I Need an Attorney for a 1031 Exchange?", "image" : { "@type" : "ImageObject", "height" : 501, "url" : "https://f.hubspotusercontent10.net/hubfs/733513/Images/photo/abstract/house-lawyer-suit-IS-1189048946.jpg", "width" : 750 }, "mainEntityOfPage" : "https://www.realized1031.com/blog/do-i-need-an-attorney-for-a-1031-exchange", "name" : "Do I Need an Attorney for a 1031 Exchange?", "publisher" : { "@type" : "Organization", "address" : { "@type" : "PostalAddress", "addressCountry" : "USA", "addressLocality" : "Austin", "addressRegion" : "TX", "postalCode" : "78701", "streetAddress" : "500 W 13th Street " }, "logo" : { "@type" : "ImageObject", "height" : 60, "url" : "http://www.realized1031.com/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black-No-Margin-296x60-AMP.png", "width" : 296 }, "name" : "Realized" }, "thumbnailUrl" : "https://f.hubspotusercontent10.net/hubfs/733513/Images/photo/abstract/house-lawyer-suit-IS-1189048946.jpg" } ```