A 1031 Exchange is usually a three-way delayed exchange, referred to as a "Starker Exchange", in which an intermediary is used to facilitate the transaction. There are four basic steps:

1. Seller arranges for sale of property and includes exchange language in contract.

2. At closing, sales proceeds go to a Qualified Intermediary for a 1031 Exchange.

3. Seller identifies potential exchange properties within 45 days of the closing.

4. Seller completes 1031 Exchange within 180 days of closing.

In a 1031 transaction, these steps can also occur simultaneously. Preferable, before you sell your property, you need to consider what type of replacement property will work best for you, and whether or not you want to own a whole or partial interest in a property. Increasingly, investors are choosing to purchase a partial Tenants In Common interest for several reasons.