1031 Exchange Clauses and Disclosures To Consider in a Contract

Skyscraper in a bustling city

When entering a 1031 exchange for potential tax deferral benefits, it is important to work with qualified professionals and use well-drafted agreements that align with IRS requirements. Certain clauses and disclosures are commonly recommended in real estate purchase and sale contracts to help clarify the intent of the parties, support the structure of the exchange, and mitigate the risk of misunderstandings. Below, Realized 1031 outlines several contract provisions often included in like-kind exchange agreements. These clauses may help align the transaction with IRS expectations and facilitate cooperation among all involved parties. 1031 Exchange Contract: Understanding the Basics

Jul 9, 2025

Can I Use a 1031 Exchange To Build an ADU?

Person calculating with out lines of houses and upwards arrow.

In recent years, accessory dwelling units (ADUs) have gained popularity. Investors can leverage ADUs to potentially increase rental income and property value, with variations like backyard cottages, basement apartments, and over-the-garage suites providing these advantages.

Jul 8, 2025

Can Capital Losses be Carried Back?

VALUE wording on increasing wooden block on coins stacking.

A Practical Guide for Investment Property Owners

Jul 7, 2025

Do Delaware Statutory Trusts (DSTs) Appreciate in Value?

Wood house and row of coin money on wood table.

Delaware Statutory Trusts (DSTs) have become a popular strategy for passive real estate investing, helping accredited investors earn income without needing hands-on involvement. Those who utilize DSTs to end 1031 exchanges also enjoy tax deferrals and income preservation.

The Tax Consequences of Transferring Property to an LLC

Midsection of accountant working on table.

Of the various strategies for managing personal liability and increasing flexibility in asset management, transferring real estate to a limited liability company (LLC) has been widely used by investors. While often used as a planning strategy, transferring property to an LLC may be more administratively feasible than some alternatives.

Jul 6, 2025

Do Lenders Do 1031 Exchanges?

Skyscrapers business office buildings dominate Manhattan landscape.

Entering a 1031 exchange allows investors to defer capital gains taxes by reinvesting proceeds from the sale of investment property into like-kind replacement property. When you undergo this transaction, you’ll work with various professionals — some strictly required and others there to make the process much easier. In the second category are lenders.

Jul 5, 2025

Download The Guide To 1031 Exchange

The 1031 Investor's Guidebook
Download eBook