Solutions
Tax Deferred Exchange 1031
Reposition real estate while deferring taxes—without disrupting your broader strategy.
A 1031 exchange can be a useful tool when real estate is part of a larger financial plan. Whether you’re selling investment property, shifting exposure, or comparing options like a sale-leaseback, it’s critical to understand the rules, risks, and alternatives. Tenet supports middle-market companies nationwide with capital strategies aligned to business goals.
What Is a 1031 Exchange and When Does It Make Sense?
A tax-deferred exchange (1031) allows you to defer certain taxes when exchanging qualifying real estate for another qualifying investment property. Most teams aren’t trying to learn tax code—they’re trying to make a smart decision with a clear plan and a timeline they can actually execute.
This structure is commonly explored when:
Selling one property to reinvest in another with a different risk profile
Consolidating or diversifying real estate holdings
Transitioning away from active management of a property
Reallocating capital while maintaining real estate exposure
For operating companies, 1031 exchanges sometimes come up as part of a broader capital strategy—but the real decision often becomes: What structure best supports your business goals and timeline?
Rules, Timelines, and Risks to Understand
A successful 1031 exchange requires precise execution and clear intent. Your advisors will help confirm:
Whether your current and target properties qualify
Whether the exchange structure aligns with your goals
Whether the 45-day and 180-day IRS timelines are realistic for you
Biggest risk? Delays. Teams often underestimate how tight the process window is. Early planning, decision speed, and alignment across your team and advisors are key.
Comparing a 1031 Exchange to a Sale-Leaseback
One of the most common comparison points is between a 1031 exchange and a sale-leaseback. Here’s how they differ:
For owner-operators, the key question becomes: Do you want to stay in the facility and reinvest into the business—or exit and reallocate into other real estate?
How Tenet Helps
Tenet Equity supports middle-market companies with practical guidance, clear structures, and predictable execution. If you’re considering a 1031 exchange:
We help clarify your capital goals—liquidity, stability, reinvestment, or growth
We work with you and your advisors to evaluate fit and confirm feasibility
We help you evaluate your after-tax proceeds, overall cost of capital and return on equity
FAQs About 1031 Exchanges
A framework that allows you to defer certain taxes when exchanging qualifying real estate for another qualifying investment property. Confirm eligibility with your tax and legal advisors.
It depends on how the property is held and your intent. Advisors will confirm whether your properties qualify.
You have 45 days to identify replacement property and 180 days to close. Timing is often the biggest challenge—plan early.
It depends. Many end up comparing this option to other capital strategies if they need occupancy and flexibility.
Execution risk—especially timing and sourcing the right replacement property.
Typically, no. It defers taxes. Future events may still trigger tax obligations.
Start with your goals and constraints. Then compare structures based on execution risk, flexibility, and alignment with your business.
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