How does a 1031 exchange work for senior housing?
Direct answer
You sell your property through a qualified intermediary, identify replacement real estate within 45 days, and close on it within 180 days. Done correctly, the tax on the gain in your senior housing real estate is deferred. Only the real property portion of a community sale qualifies.
What to know
The sequence matters. The qualified intermediary must be engaged before your sale closes, because you cannot touch the proceeds. Your identification notice is due within 45 days, and the replacement purchase must close within 180 days of the sale or by your tax return due date, whichever comes first without an extension.
Identification follows one of three rules: up to three properties of any value, any number of properties worth no more than 200% of what you sold, or more than that only if you acquire at least 95% of the total value identified. The same taxpayer must sell and buy, and boot, meaning cash received or debt not replaced, is taxable. Reverse and improvement exchanges exist but cost more.
This is general information, not tax, legal or investment advice. Talk to your CPA and attorney about your situation.
How Haven helps
Haven helps sellers time a community sale around an exchange and helps buyers source replacement properties inside the 45-day window. Read our 1031 exchange guide for senior housing.