Case Examples
Illustrative 1031 Exchange Scenarios
The following examples are provided to demonstrate common 1031 exchange structures and planning considerations. These scenarios are illustrative only and are not intended to represent actual transactions, specific investment opportunities, or projected outcomes.
Purpose of These Examples
1031 exchanges can vary significantly based on timing, property type, ownership structure, and long-term objectives. These case examples are designed to help investors and advisors visualize how different exchange strategies may be coordinated in practice.
Each example highlights:
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Exchange timing and structure
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Replacement property considerations
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Coordination among advisors and intermediaries
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Long-term planning implications
Example 1: Single-Property Sale to DST Replacement
Scenario Overview
An investor sells a fully depreciated multifamily property and seeks to defer capital gains while reducing operational responsibility.
Key Considerations
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Sale of a single relinquished property
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Identification of multiple DST replacement options
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Allocation across institutional-grade real estate
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Passive ownership structure following the exchange
Planning Outcome
The scenario illustrates a compliant 1031 exchange structure while transitioning from active property management to passive ownership, preserving exchange eligibility for future planning.
Example 2: Portfolio Consolidation Exchange
Scenario Overview
An investor exits multiple smaller properties and consolidates into fewer, larger replacement interests.
Key Considerations
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Multiple relinquished properties sold within exchange timelines
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Coordinated replacement property identification strategy
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Emphasis on diversification and income continuity
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Advisor-led planning across tax, legal, and investment teams
Planning Outcome
The exchange structure simplifies ongoing ownership while maintaining tax deferral and long-term flexibility.
Example 3: Timing-Driven Exchange Strategy
Scenario Overview
An investor faces a compressed timeline following a property sale and requires an exchange structure that reduces execution risk.
Key Considerations
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Strict 45-day identification and 180-day closing deadlines
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Replacement strategy designed for execution certainty
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Alignment between qualified intermediary and advisory team
Planning Outcome
The exchange is completed within IRS timelines, allowing the investor to preserve capital deferral treatment while maintaining optionality for future decisions.
How These Examples Should Be Used
These case examples are intended to:
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Support education and planning discussions
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Help investors understand common exchange structures
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Assist advisors in coordinating roles and expectations
They are not recommendations, solicitations, or projections of performance.
Continue Learning
Additional resources are available to support deeper understanding of exchange fundamentals, replacement strategies, and advisor coordination.
These examples are hypothetical and for educational purposes only. They do not represent actual transactions or outcomes. i1031u.com does not provide tax, legal, or investment advice. Investors should consult their own advisors regarding their specific circumstances.