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A 1031 exchange, also known as a tax-deferred exchange, is an investment strategy that allows you to protect, grow and diversify your assets – tax free. To qualify, you need to adhere to some basic rules: Basic Requirements: You must purchase new property or properties of equal or greater value and you must spend all the cash or other benefits received from your sale. Identification Period: You have 45 days from the date of the closing of your old property to identify the property or properties that you want to buy. Exchange Period: You have 180 days from the date of the closing of your old property to purchase the property or properties that you want to buy. Vesting Requirement: The taxpayer who sells the old property must be the same taxpayer who purchases the new property. Net Proceeds: You cannot have actual or constructive receipt of the funds from your sale. Use Requirements: Your old property and your new property must be held for investment or use in a trade of business. At 1031 Asset Exchange, LLC, we simplify the exchange process for you. For more in-depth understanding, visit our 1031 Dictionary and FAQs.