Miscellaneous
Yes. The IRS requires the use of an intermediary in virtually every 1031 transaction and the QI must be engaged before the relinquished property is sold.
Yes, you can buy ANY kind of business or investment real estate, anywhere in the US. You can sell the rental house and buy apartments, commercial, industrial, mini storage, bare land, agricultural, etc.
The replacement property needs to be purchased with the intent of being a business or investment property. In 2008 the IRS issued a safe-harbor that defines how to treat your replacement property for the two-year period after the exchange in order to safe-harbor your exchange. A common belief is that you can then convert it to personal use. However, any type of conversion needs to be discussed with your tax advisor first.
No. Unless you have been affected by a federally declared disaster, the IRS doesn’t have any provisions for extensions or exceptions – not even to the next business day if the deadline falls on a weekend or holiday. The best way to get more time is to start looking for your replacement property well before that closing of your sale property or to extend the closing date on your sale.
No. It needs to be the same TAXPAYER. So you can sell the property in your revocable trust and buy it in your name because you are the same taxpayer. However you cannot sell as a partnership and buy as individuals – those are not the same taxpaying entities.
Timing and Deadlines
Yes, but that is called a “reverse exchange”, which is more expensive and more work.
The identification form only requires that you give the addresses to the properties you are identifying by the 45th day. However if they are sold to someone else on day 46, you are out of luck. So it is recommended that you are in a firm contract by then.
Yes. During the 45 days you can change what you’ve identified, but once your identification period is up, you must buy from only that list. No substitutions or changes after day 45.
No. Unless you have been affected by a federally declared disaster, the IRS doesn’t have any provisions for extensions or exceptions – not even to the next business day if the deadline falls on a weekend or holiday. The best way to get more time is to start looking for your replacement property well before that closing of your sale property or to extend the closing date on your sale.
Money
No. To defer all your taxes, you need to replace the entire net sales price of what you sell, not just the gain. (“Net” refers to the sales price less the closing costs, such as escrow, title, and broker fees. Do NOT subtract the loan balance.)
You need to replace the value of the loan. Either with another loan or with additional cash you may have.
Improvements
What you did with the property is a separate issue from the exchange itself. If you receive some cash back at the close of escrow to “pay your-self back” that is a taxable boot. However, your tax advisor may be able to create some tax deductions to offset your taxable boot.
The day you take title to the property is the end of the exchange for that property. If you have cash left over, that is taxable boot. There is something called a build-to-suit or improvement exchange, where the intermediary takes title to the property to make the improvements before you take ownership. This is also a more expensive and complicated transaction.
Family
Yes, but they need to be treated like a regular tenant, including paying fair market rent for the property.
Yes, but you would need to buy the property as tenants-in-common, where your share of the property should be equal or greater to what you sold. Also, do not create a partnership or multiple-member LLC to own the property. How you structure the co-ownership of property coming out of an exchange should be discussed with your tax advisor.