A 1031 exchange consultation checklist should help you arrive with the facts an advisor needs to understand your property, timing, ownership, debt, tax questions, and replacement-property goals. You do not need every exchange document completed before the conversation. The goal is to gather enough accurate information to identify what must happen before your sale closes, which questions belong with your qualified intermediary, and which issues should be reviewed by your CPA, attorney, lender, or other advisor.
Preparing ahead can make the consultation much more useful, especially if your property is already listed or under contract. A few numbers and documents gathered before the meeting can also reveal issues that deserve attention before the 45-day identification period ever begins.
Know What You Want the Consultation to Accomplish
A productive 1031 exchange consultation is not simply a general explanation of Section 1031. It should help organize the next steps for your actual transaction.
At the beginning of the conversation, be prepared to explain where you are in the sale process and what you hope to accomplish. Are you still deciding whether to sell? Is the property listed? Are you under contract? Have you already chosen a closing date? Do you intend to purchase another property directly, or are you considering alternatives that may reduce your management responsibilities?
You should also distinguish the questions a qualified intermediary can help address from questions that require tax or legal advice. A QI can explain the exchange process, prepare exchange documents, coordinate the handling of exchange funds, and work with the closing parties. Your CPA or tax attorney should evaluate how Section 1031 applies to your individual tax situation.
Gather the Basic Facts About the Property You Plan to Sell
You do not need to create a complicated file before calling. Start with the basic facts about the relinquished property and gather supporting documents when they are readily available.
| Information to Gather | Why It Helps | Useful Source |
|---|---|---|
| Property address and property type | Establishes what property may be involved in the exchange. | Property records, tax statement, or listing |
| How the property is currently used | Helps identify questions about investment or business use that your tax advisor may need to review. | Your operating records or lease information |
| Current legal owner | Ownership and taxpayer identity can affect how the transaction needs to be reviewed and documented. | Deed, LLC records, trust documents, or other ownership records |
| Expected sale price | Provides an initial picture of the size of the transaction. | Listing agreement, purchase contract, or estimate |
| Current mortgage or other property debt | Debt affects expected equity and may be important when planning replacement property. | Recent lender statement |
| Original purchase price and purchase date | Gives your tax advisor a starting point for reviewing basis and gain. | Original closing statement or purchase records |
| Major capital improvements | Improvements may affect adjusted basis and should be reviewed with your tax professional. | Invoices, accounting records, or depreciation schedules |
| Depreciation claimed | Accumulated depreciation is different from equity and can materially affect the tax analysis. | Depreciation schedule or tax records from your CPA |
| Listing, contract, and expected closing date | Shows how much pre-closing planning time remains. | Listing agreement or purchase and sale agreement |
| Prior 1031 exchange information | A prior exchange may affect the property’s tax basis and should be disclosed to your tax professional. | Prior exchange and tax records |
| Advisor contact information | Makes it easier for the QI, CPA, attorney, lender, and closing agent to coordinate when necessary. | Your professional contact list |
These are preparation items, not a universal list of documents legally required for every 1031 exchange. Your QI, closing agent, CPA, or attorney may request additional information depending on your transaction.
Bring Your Timing Information Before the Sale Closes
Timing deserves attention before anything else. If you plan to use a qualified intermediary in a delayed exchange, the exchange structure and handling of the sale proceeds should be arranged before the relinquished property closes. The IRS describes qualified intermediaries as one of the safe harbors used to avoid actual or constructive receipt of exchange proceeds in a deferred exchange. You can review the federal rules in IRS Publication 544.
Once the relinquished property is transferred, the identification and exchange periods begin. Replacement property generally must be identified within 45 days and received within 180 days, or by the applicable tax return due date if earlier. If you already know your anticipated sale closing date, use the 1031 Exchange Date Calculator before the consultation so you understand the calendar you may be working with.
Important planning point: If your sale is already under contract, tell the advisor your expected closing date at the beginning of the conversation. Pre-closing tasks may deserve priority over replacement-property discussions.
Do Not Confuse Equity, Debt, and Tax Basis
Three numbers that are often mixed together are equity, outstanding debt, and adjusted tax basis. They answer different questions.
Your equity is generally related to the property’s value or sale proceeds after debt and transaction costs. Your outstanding mortgage tells you how much debt will be paid off at sale. Your adjusted tax basis begins with your tax basis in the property and is affected by items such as capital improvements and depreciation.
Knowing your mortgage balance does not tell you your taxable gain. Likewise, knowing your equity does not tell you your adjusted basis. If you do not know your adjusted basis or accumulated depreciation, that is normal. Bring the records you have and ask your CPA or tax professional to calculate the tax figures needed for planning.
Think Through Your Replacement Property Goals
A consultation is more productive when you can explain what you want the next property to accomplish instead of focusing only on avoiding tax.
Consider how much management you want, whether maintaining direct control is important, how much liquidity you may need outside the exchange, whether replacement debt is acceptable, and whether you prefer one property or exposure to multiple properties. Retiring landlords may also want to discuss whether another actively managed rental still fits their lifestyle.
If lower-management real estate is part of the discussion, you can familiarize yourself with Delaware Statutory Trusts and Tenants in Common ownership before the meeting. Those ownership structures have different control, financing, liquidity, fee, legal, tax, and investment considerations. Whether a particular property or offering is appropriate is a separate question from whether an exchange can qualify for tax deferral.
You do not need to select a replacement property before the first consultation. It is often more useful to arrive with a clear description of your priorities, constraints, and concerns.
Bring the Right Advisors Into the Conversation
A 1031 exchange can involve several different professional roles. Understanding those roles early helps prevent important questions from being directed to the wrong person.
Your qualified intermediary handles the exchange mechanics and exchange funds under the applicable documents. Your CPA or tax attorney should review tax qualification, adjusted basis, depreciation, recognized gain, and other taxpayer-specific issues. A real estate attorney may be appropriate for ownership, contracts, entities, trusts, or other legal questions. Your lender and real estate professionals may also need to coordinate their work with the exchange timeline.
After the exchange, Section 1031 transactions are generally reported on Form 8824. The current IRS Form 8824 instructions explain the federal reporting requirements. Your tax professional should prepare or review the filing based on your actual transaction.
Questions to Bring to Your 1031 Exchange Consultation
Write down your questions before the meeting. The most useful questions focus on the transaction in front of you rather than asking for a general explanation of every possible exchange rule.
- What needs to be completed before my relinquished property closes?
- What information or documents do you need from me to establish the exchange?
- How will the QI coordinate with my title company, escrow officer, closing attorney, or other closing professional?
- How will I submit a replacement-property identification, and how are the 45-day and 180-day dates tracked?
- Which questions should I take to my CPA or tax attorney before moving forward?
- Are there ownership, entity, trust, partnership, related-party, or taxpayer-identity issues that should receive professional review before closing?
- What should my tax professional calculate so I understand basis, depreciation, estimated gain, and potential taxable boot?
- If I am considering more than one replacement-property strategy, what information should I gather before comparing those choices?
- What exchange fees may apply to my transaction? Review the current 1031 exchange pricing before the meeting if cost is one of your questions.
- What are the next three actions after this consultation, who is responsible for each one, and when should each be completed?
Questions about how a QI protects exchange funds, insurance, internal controls, banking arrangements, and provider experience are also important when selecting an intermediary. Those provider-selection questions are different from preparing the facts of your own transaction.
A Hypothetical Consultation Example
Assume a landlord is considering selling a rental property for $1.2 million. The current mortgage balance is approximately $320,000. The owner originally purchased the property for $450,000, later completed approximately $80,000 of capital improvements, and believes about $150,000 of depreciation has been claimed.
Before the consultation, the owner gathers the original closing statement, a recent mortgage statement, the expected sale price, the depreciation schedule from the CPA, and a list of major improvements. The owner also explains that the main goal is to stop managing tenants and repairs while remaining invested in real estate.
Those facts immediately create several productive conversations. The QI can focus on exchange timing and transaction mechanics. The CPA can verify the adjusted basis rather than attempting to estimate it from the owner’s current equity. The replacement-property conversation can focus on the owner’s management preferences, debt tolerance, liquidity needs, and other investment objectives.
The hypothetical owner’s $880,000 difference between sale price and mortgage debt is not the same as taxable gain, and it is not an adjusted-basis calculation. That distinction is precisely why gathering both property records and tax information before the consultation is useful.
Leave the Consultation With a Written Action Plan
A good consultation should leave you with specific next steps rather than a larger collection of unanswered questions.
Before the meeting ends, confirm who will contact the closing agent, what documents still need to be provided, which questions need CPA or legal review, whether financing needs to be addressed, when replacement-property planning should begin, and what must happen before the relinquished property closes.
If you are early in the process, you may not need every answer immediately. What matters is knowing which decisions must be made before closing and which can wait until later in the exchange.
If you are preparing to sell an investment property or are already under contract, gather the information above and talk with a 1031 Exchange Place advisor about your transaction. We can help organize the qualified intermediary side of the exchange and coordinate the process while your tax and legal professionals address the questions that require individualized advice.
