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Disposition refers to the act of selling or transferring the relinquished property, which is the property the taxpayer currently owns and intends to exchange for a like-kind property.

A disposition occurs when the taxpayer transfers legal ownership of the relinquished property to a buyer or other entity, typically in exchange for cash or other consideration. The disposition is a critical step in the 1031 exchange process, as it triggers the start of the 45-day identification period during which the taxpayer must identify potential replacement properties.

It is important to follow the rules and guidelines for disposing of property in a 1031 exchange, as failure to do so can result in tax consequences and potential disqualification of the exchange.

Have questions?

We'd love to guide you through the 1031 process, let us know how we can help!