A Designation Notice is a document used in a 1031 exchange that identifies the replacement property that the taxpayer intends to acquire. The Designation Notice must be submitted to the Qualified Intermediary (QI) within the 45-day identification period and must specify the replacement property or properties that the taxpayer intends to acquire.
Key-Takeaway
- A Designation Notice is a document used in a 1031 exchange that identifies the replacement property that the taxpayer intends to acquire.
- The Designation Notice must be submitted to the Qualified Intermediary within the 45-day identification period.
- The Designation Notice must specify the replacement property or properties that the taxpayer intends to acquire.
Recommendations
- Seek the assistance of a tax professional or qualified intermediary to ensure that the Designation Notice is completed correctly.
- Document all steps of the 1031 exchange, including the submission of the Designation Notice, to maintain a clear record of the transaction.
- Consider the use of a Delaware Statutory Trust (DST) or Qualified Opportunity Fund (QOF) to defer the tax on the gain from the sale of the property.
