Investor Resource
1031 Exchange guide.
A Section 1031 like-kind exchange lets you defer capital gains tax by rolling the proceeds from the sale of an investment property into a replacement property. In a market like Orlando — where constrained luxury supply and strong STR demand create compelling reinvestment opportunities — exchange buyers with equity to deploy have real options.
Nothing on this page is tax or legal advice. Work with a licensed CPA and qualified intermediary for your specific exchange. Ryan can refer you to both.
Critical deadlines
The 180-day clock.
A 1031 exchange is run on a strict timeline from the day the relinquished property closes. Both deadlines are absolute.
Day 0
Sale closes (relinquished property)
The clock starts the moment your relinquished property closes escrow. Do not touch the proceeds — they must go directly to a Qualified Intermediary (QI). If proceeds are constructively received by you, the exchange is disqualified.
Day 1–45
Identification period
You must identify replacement property or properties in writing to your QI within 45 calendar days. No extensions are available under any circumstances — this deadline is absolute. Three rules govern identification: 3-property rule, 200% rule, or 95% rule.
Day 45–180
Exchange period
You must close on one or more of your identified replacement properties within 180 calendar days of closing your relinquished property (or your tax return due date, whichever comes first). Working backward from this deadline is how your search strategy is built.
Day 180
Exchange deadline
All exchange funds must be invested in qualified replacement property. Any unused exchange funds are released by the QI and become taxable. A failed exchange — whether from missed deadlines, disqualified property, or procedural error — triggers full capital gains recognition.
Day 1–45
The three identification rules.
You must formally identify replacement property within 45 days. Three rules govern how many and how much — only one applies per exchange.
3-Property Rule
Identify up to three properties of any value. Most exchanges use this rule. Simple, clear, and easy to defend if audited.
Use when:
Best for buyers who know which 1–3 properties they want
200% Rule
Identify any number of properties as long as their combined fair market value does not exceed 200% of the relinquished property's value.
Use when:
Best for buyers targeting multiple smaller properties or unsure of final selection
95% Rule
Identify any number of properties of any value, but you must acquire at least 95% of the total identified value.
Use when:
Rarely used — creates high acquisition burden and execution risk
Replacement property
Why Orlando makes sense for exchange buyers.
Constrained supply = sustainable value
Dr. Phillips and Windermere are bounded by lakes, theme park land, and existing development. New luxury supply is limited. Exchange buyers who park equity here are buying into markets where appreciation is structurally supported.
STR potential in approved zones
Exchange equity can be deployed into short-term rental properties — Kissimmee, Four Corners, and Clermont are in STR-approved zones with strong occupancy data. Cash-on-cash returns of 12–18% have been achievable in well-underwritten acquisitions.
Tight timelines, deep inventory knowledge
A 45-day identification window is not the time to start your search. Ryan maintains active knowledge of off-market opportunities and coming-soon listings that allow exchange buyers to move with confidence before the deadline.
1031 into luxury, out of management headaches
Many exchange buyers are trading out of active management-intensive properties (multifamily, commercial) into a luxury residence or vacation property. Orlando's market supports both end uses — and Ryan knows which properties deliver on both fronts.
Common questions
1031 FAQ.
Can I do a 1031 exchange on my primary residence?
No. Section 1031 applies to investment or business property. Your primary residence is excluded. However, if you previously rented your primary residence or converted it to investment use, partial qualification may apply. Consult a CPA.
What is 'boot' and how does it affect my exchange?
Boot is any value received in an exchange that is not like-kind property — typically cash not reinvested, or net debt reduction. Boot is taxable in the year of the exchange. To defer all capital gains, you must reinvest all equity and replace or increase the debt.
Can I identify a replacement property before I sell?
Yes — this is a forward exchange (also called an improvement exchange or reverse exchange). The mechanics are more complex and the QI must actually take title to the replacement property, but it is fully valid under IRS rules. Costs are higher.
What qualifies as 'like-kind' property in real estate?
In real estate, 'like-kind' is broadly interpreted. Most U.S. real property exchanges with other U.S. real property qualify — residential rental for commercial, bare land for an apartment building, waterfront for STR. Foreign property does not qualify as replacement for U.S. property.
Does a vacation home qualify as replacement property?
A vacation home can qualify if it meets the IRS safe harbor: owned for at least 24 months, rented at fair market value for at least 14 days per year, and personal use does not exceed 14 days or 10% of rental days in each 12-month period.
What happens if I miss the 45-day identification deadline?
The exchange is disqualified in full. There are no extensions and no exceptions — not for natural disasters, illness, or escrow delays. The 45-day rule is absolute. This is why exchange buyers need an active search strategy before their relinquished property closes.
All information is for educational purposes only and does not constitute tax, legal, or investment advice. Consult a qualified CPA and qualified intermediary before executing a 1031 exchange.
Exchange buyers
The clock is ticking. Start early.
Exchange buyers who wait until after they close to start their search lose weeks of the 45-day window. Ryan works with exchange buyers pre-close to identify inventory, model replacement properties, and line up a QI introduction before Day 0.