Trade up without cashing out.
When you sell investment or business real estate, the gain is normally taxable. A 1031 exchange lets you defer that tax by “exchanging” the property for another of like kind — rolling your equity forward instead of handing a slice to the IRS.
Most exchanges happen one of two ways: a simultaneous trade for other real estate, or selling to one party and acquiring replacement property from another. Unless the swap is truly simultaneous, the law requires a qualified intermediary to hold the proceeds between the sale and the purchase.
It’s important to know this is a deferral, not forgiveness. Your original cost basis carries forward into the new property, and the tax comes due if you eventually sell without exchanging again.
Equity that keeps working.
Defer the tax
Keep capital gains and depreciation-recapture tax invested in real estate instead of paying it at closing.
More buying power
Reinvesting the full proceeds — not the after-tax remainder — means a larger down payment and bigger replacement property.
Diversify or consolidate
Trade one property for several, or several for one. Shift markets, asset types, or management burden.
Build a legacy
Exchanges can be repeated for years; heirs may receive a stepped-up basis, potentially erasing the deferred gain.
Where Mesa 1031 comes in.
A 1031 exchange has to be structured correctly from the start. The IRS does not allow you to take possession of the sale proceeds, even briefly, or the exchange fails. That’s the job of a qualified intermediary (QI).
As your QI, Mesa 1031 prepares the exchange agreement, instructs the title company, and holds your proceeds in a secure account between the sale and the purchase. When you’re ready to close on the replacement property, we advance the funds and the property is deeded directly to you.
Because we’re local, your money stays in an Arizona bank and you work with the same people from first call to final closing.
Meet the team →Both clocks start the day your sale closes. The IRS does not grant extensions.
Four things to get right.
Like-kind, held for investment
Almost any U.S. real estate held for business or investment qualifies, such as land for an apartment building or a rental for a retail strip. Your primary residence does not qualify.
The same taxpayer
Whoever sold the relinquished property must take title to the replacement property. The taxpayer on both sides has to match.
Identification limits
Within 45 days you may identify up to three properties (any value), or more under the 200% rule. The replacement must come from that list.
Equal or greater value
To defer the full gain, reinvest all proceeds and replace your debt with equal or greater value. Anything left over (“boot”) is taxable.
1031 exchanges, answered.
Do I need a qualified intermediary?+
For any non-simultaneous exchange, yes — it’s required by the IRS. You cannot receive or control the sale proceeds yourself. A QI like Mesa 1031 must be engaged before your sale closes.
What types of property qualify?+
Real property held for investment or use in a trade or business: rentals, commercial buildings, raw land, farm and ranch land. Personal residences and property held primarily for resale (“flips”) generally do not qualify.
What happens if I miss the 45- or 180-day deadline?+
The deadlines are strict and not extendable except in limited federally declared disaster situations. Missing them typically means the exchange fails and the gain becomes taxable, which is exactly why we track every date with you.
Can I do this with property in another state?+
Yes. Replacement property can be anywhere in the United States — you’re not limited to Arizona. We coordinate with out-of-state title companies as needed.
How much does an exchange cost?+
A standard forward exchange involves a flat intermediary fee that is small relative to the tax typically deferred. Reverse and construction exchanges involve additional work. We’ll quote your specific situation up front.
Have a sale on the horizon?
The best time to set up an exchange is before you sign a sale contract. Let’s talk through your options.