Risks of a 1031 Exchange

A 1031 exchange investment carries several risks, including but not limited to:

  • If the strict timeline and procedural rules are not followed, the 1031 exchange may be disqualified.
  • There are no guarantees that
    • The IRS will approve each individual exchange
    • Tax laws will not be altered in the future
    • The IRS will not change its application of present law to future cases

The full scope of your tax-related risks can only be determined in consultation with your personal tax advisor, who should have full knowledge of your tax situation and the specific laws of the state in which you reside.