Requires strict timing: 45 days to identify replacement properties and 180 days to close. For inherited property, a 1031 exchange typically requires first converting the inherited house to investment use — usually a documented rental period of 24+ months.
Related terms
Step-Up in Basis
A federal tax rule (IRC §1014) that resets an inherited asset's cost basis to its fair market value on the date of the original owner's death.
Probate
The court-supervised process of validating a will, paying the deceased's debts, and transferring remaining assets to heirs.
Inheritance Tax
A state-level tax paid by the heir on the value of property received from a deceased person.