The Complete EGX
1031 Exchange Guide

Deferring Capital Gains Through A
1031 Exchange

A 1031 exchange defers 100% of capital gains tax when proceeds from one investment property are reinvested into another like-kind property. Properly structured, it preserves capital, compounds returns over multiple cycles, and through inheritance eliminates the deferred gain entirely under a step-up in basis.

The mechanics are unforgiving. 45 days to identify the replacement. 180 days to close. A qualified intermediary must hold proceeds. Miss a deadline and the IRS treats the transaction as a sale. EGX coordinates strategy alongside qualified intermediaries, tax counsel, and securities counsel on every engagement.

$1M Basis → $3M Sale
The Real Math

An investor purchased a property for $1M in the early 2000s. Twenty-five years later it appraises at $3M. A direct sale triggers a stack of taxes against the $2M gain plus depreciation recapture. An EGX-sourced 1031 exchange defers the entire stack and lifts forward yield.

Calculate Your
45 & 180-Day Deadlines

Enter your projected or actual close date on the relinquished property. EGX returns your identification and exchange deadlines instantly.

The 45-day clock starts the day escrow closes on the relinquished property. Identification must be in writing, signed, and delivered to the qualified intermediary. The 180-day window runs concurrently. There are no 45 + 180 days, only 180 days total. EGX coordinates this sequencing alongside the QI and CPA before the relinquished property lists.

The Three Rules
Of Exchanging

Within the 45-day identification window, the IRS provides three rules for identifying replacement property. One must be satisfied - not all three - for the exchange to remain valid. The chosen rule dictates how many properties may be identified and how their values are tested.

Identification must be in writing, signed, and delivered to the qualified intermediary by midnight of day 45. Verbal identifications and email-only references do not satisfy the rule. EGX coordinates identification documentation with the QI to ensure compliance.

Four Types
Of Exchanges

The right structure depends on timing, financing, and the relationship between the relinquished and replacement properties. EGX evaluates the optimal path before engagement and coordinates the QI accordingly.

Wide-Latitude Replacement
Across Asset Class & Geography

The §1031 like-kind rule is wider than most operators assume. Exit a single asset, enter multiple replacements across both asset class and U.S. geography inside one rollover. Tax deferred, basis preserved.

Like-kind scope. Replacement must be U.S. real property held for investment or productive use. Personal residences excluded. Reverse, delayed, and build-to-suit structures available. EGX coordinates QI + sourcing. Illustrative composition; not investment advice.

What A Properly Structured 1031
Actually Delivers

Compounded Deferral
Eliminated At Transfer

Heirs receive replacement property at fair market value under a full step-up in basis. Every dollar of tax deferred across multiple 1031 cycles is wiped out at transfer. Properly structured with a living trust, this is the most efficient lifetime tax outcome in U.S. real estate.

Educational only. Not tax, legal, or investment advice. Engage your qualified intermediary, CPA, and counsel before initiating an exchange. Brokerage services through eXp Commercial.

Frequently Asked Questions
FAQ

FAQ content is general guidance, not tax or legal advice. Consult qualified counsel on every transaction.

Walk through the relinquished asset, basis, timing, and replacement criteria with the EGX team. You get a real answer.