An “Improvement Exchange” allows investors to make improvements to the replacement property they purchase in their 1031 Exchange, and have the value of those improvements count dollar-for-dollar towards the purchase price of their new property. While these improvements must be made within the 180-day timeframe of the investor’s exchange, the Improvement Exchange makes it possible to purchase “fixer-upper” properties in a 1031 Exchange, and helps investors get credit towards their 1031 Exchange for the improvements they make.
Bottom Line: An “Improvement Exchange” allows investors to make improvements to the replacement property they purchase in their 1031 Exchange, and have the value of those improvements count dollar-for-dollar towards the purchase price of their new property.
