Replacement Property
The property you buy with the proceeds to complete the exchange — the "new" property.
Definition
The replacement property (the "upleg") is the like-kind real estate you acquire to complete your exchange. To fully defer tax, its value and the debt on it generally need to equal or exceed the property you sold, and you must reinvest all of the net proceeds. Anything you keep — cash or debt relief — becomes taxable boot.
Why it matters
You must formally identify your replacement candidates within 45 days and close within 180. With xchange1031 you can change your identified list any time up to day 45, so a better property found late still counts.
Related terms
General education — not tax or legal advice. This explains how §1031 exchanges work in general terms and uses simplified assumptions. Rules and tax rates change and your situation is specific. Talk to a qualified CPA or tax attorney before you rely on any of it. See our full terms & legal notice.