Under Internal Revenue Code 1031, investors may reinvest proceeds from an investment real estate sale into like-kind property as outlined by the IRS. Investors, who no longer wish to perform day-to-day management duties for a property, often turn to tenancy-in-common structured offerings. Through tenancy in common, in which a sponsor offers a property as a co-ownership to a group of accredited investors, those looking to complete a 1031 exchange can have access to institutional quality real estate without the burden of daily management.

To qualify for a 1031 starker exchange, the investor must meet Internal Revenue rules for tax deferment. First, the exchanger has 180 days from the relinquishment of the property to acquire a replacement property. The exchanger only has 45 days from relinquishment of the property to identify the properties he or she hopes to acquire. In order to protect the tax deferment, investors should identify replacement properties carefully - and always identify alternatives should the first-choice property acquisition not come to pass for any number of reasons. Protecting one's 1031 starker exchange requires significant research before the 45-day deadline to ensure that a range of acceptable options has been identified to the Internal Revenue Service and the investor is protected in case of unforeseen circumstances.

For more information on 1031 starker exchanges, please click here.