top of page

Sell Your Current Property – The Relinquished Property Step

​

The first step in a successful 1031 exchange begins with selling your current investment or business-use property—known as the relinquished property. This phase is critical, as it starts the IRS-regulated timeline that governs the entire exchange process.

 

What Is a Relinquished Property?

In a 1031 exchange, the relinquished property is the asset you're selling in order to reinvest the proceeds into a new, like-kind property. To qualify for full tax deferral, the sale must meet strict IRS requirements—and must be handled through a Qualified Intermediary (QI).

​

Steps to Selling Your Relinquished Property

  1. Choose Commonwealth1031.com LLC as your Qualified Intermediary. Before you close on your sale, you must designate us as your QI to hold the proceeds. You cannot take possession of the funds yourself at any time.

  2. List and Market Your Property
    Work with your real estate agent to prepare, list, and market your investment property for sale.

  3. Enter Into a Sales Contract
    Once you find a buyer, enter into a sales agreement that includes specific language noting your intent to complete a 1031 exchange.

  4. Coordinate With Your Intermediary
    Your QI will prepare the necessary exchange documents and coordinate the closing with your title company or attorney.

  5. Close the Sale
    At closing, the proceeds from the sale go directly to Commonwealth1031.com LLC as your QI—not to you. This ensures compliance with IRS guidelines and protects your tax-deferred status.

​

Important Deadlines Start Here

Once the relinquished property closes, two critical deadlines begin:

  • 45-Day Identification Window
    You have 45 days to identify your replacement property or properties.

  • 180-Day Exchange Period
    You must close on the replacement property within 180 days from the date you closed on the relinquished property.

​

Maximize Your Exchange Potential

Selling your relinquished property is more than just a sale—it's the foundation of your exchange strategy. The decisions you make here will impact your ability to defer taxes, reinvest in stronger markets, and grow your portfolio.

bottom of page