They have set regulation that make the name of the person that is tax compliant to appear on the property for identification purposes. Since he represents the person who buys the property and the holder of the title who will be responsible for filing the tax returns. Making him to take full control of the property. Another important thing is that single limited company companies can also act as the owner of the property upon agreement by the original property owner.
We also have replacement rule which is also part of 1031 exchange. This rule is only valid within a period of one hundred and eighty days preceding the closing of the original or first property. In addition, the property can also be bought and then replaced with the second property upon closing of the first property and the extension of exchangers return.
Apart from that post closing of the first property can be done within a period of 45 days. It acts as an allowance for the identification of either the accommodator or closing the entity address of the possible replacement of property. Another thing is that the owner of the property will still be allowed 45 days for the submission of the property for sale in situation where the replacement property is packed. Three party rules allows for the selection of three property not considering their values. Compared to two hundred percent rule which only gives chance for selecting of at most three property considering the fact that it should not be past two hundred percent of property sold. Apart from that there is also ninety-five percent exemption rule which give an allowance of ninety-five percent of what is identified to be bought if the value of the item sold exceeds two hundred percent of the property.
You can as well talk of trading up. The first thing is that the net market value and the equity of the property must be equal to or greater than the replacement property to push forward one hundred percent of the tax on the difference. That difference is important since it determines the tax to be paid. The difference is seen to the sense that additional equity can offset debts and vice versa is not true.
Another thing is that 1031 code does not have hold time but they take some time to determine some of the necessities. Some of the necessities will include determining whether the equipment was acquired immediately before the exchange time and others as well.
You should also know that 1031 exchange is not for personal use but for investment and business property. On that note you will remain in your residence without swapping.