Can I do a 1031 exchange when I sell?

Short answer: Yes, if the building was held for investment or for use in a business. Under IRS rules you must identify the replacement real property within 45 days after the sale and receive it within 180 days, or by the due date of your tax return (including extensions) if that is earlier. Source: IRS Instructions for Form 8824.

The rules that matter for a seller

• For 2018 and later, like-kind exchange treatment applies only to real property held for use in a trade or business or for investment, not property held primarily for sale.
• 45 days to identify the replacement property, counted from the transfer of the property you sell.
• 180 days to receive it, or your tax-return due date with extensions if earlier.
• In a deferred exchange, a qualified intermediary (QI) holds the proceeds. The IRS says related parties and agents of the taxpayer cannot be the QI.
• The exchange is reported on Form 8824 with your tax return.

Planning the sale around the exchange

Tell the office early if you plan an exchange, so the escrow, the QI, and the 45-day identification window are planned together. The clock starts when your sale transfers.

Does it avoid Measure ULA?

No. A 1031 exchange defers income tax on the gain. Measure ULA and the City’s base transfer tax are taxes on the transfer itself. See Does Measure ULA apply when I sell? and confirm with your CPA.

More: how a sale works and a free broker opinion of value.

General information, not legal or tax advice.