1031 Exchange Requirements
In order to incur all the benefits of a
tenants in common exchange, each exchange must satisfy all of the requirements.
First, 100% of the monies earned on the sale of the relinquished income property must be reinvested into the second income property.
Second, the debt on the like kind replacement income property must be equal to or greater than the debt held on the relinquished income property.
Each exchange, including tenants in common exchanges, requires the use of a Qualified Intermediary to hold all proceeds of the transaction, prepare any paperwork, and answer any technical questions involved with the exchange.
Finally, a 1031 exchange is defined as the exchange of any like kind income property or income properties for another like kind replacement income property or income properties. As such, all income properties involved in the exchange must be qualified like kind income properties in order to incur the benefits involved with any 1031 tenants in common exchange.