A 1031 exchange lets real estate investors defer capital gains taxes by selling an investment property and buying another “like-kind” property. Here is how it works for Baltimore and Maryland investors, and how we can help on both the sale and the purchase.
1031 exchange basics
- Both properties must be held for investment or business use, not as a primary residence.
- You generally have 45 days after closing the sale to identify replacement properties.
- You generally have 180 days to close on the replacement.
- A qualified intermediary must hold the sale proceeds; you can’t take the money yourself.
- To defer all of the tax, buy replacement property of equal or greater value and reinvest all the proceeds.
Common replacement property options
- Rental homes and small multi-family in Baltimore and surrounding counties
- Triple net (NNN) leased properties, where the tenant pays taxes, insurance, and maintenance
- Delaware Statutory Trusts (DSTs), a passive, fractional option sold through securities professionals
Meet your local team
We’re the Maryland Home Options team at Everything Real Estate, a licensed Maryland brokerage (lic. #524502). Every request comes to Ron Howard first. He reviews it personally and connects you with the agent who knows your area, so you hear from a real local person, not a call center.
How Maryland Home Options helps
- Sell your current rental, as-is or listed
- Find replacement properties that fit your 45-day window
- Coordinate timing with your qualified intermediary and title company
Common questions
Can I do a 1031 exchange on a Baltimore rowhouse rental?
Generally yes, if it was held as an investment and you follow the exchange rules. Work with a qualified intermediary and tax advisor.
What is a DST in a 1031 exchange?
A Delaware Statutory Trust lets you own a fractional interest in larger properties as your replacement property. It is passive, and it is sold through licensed securities professionals.
What happens if I miss the 45-day deadline?
The exchange will typically fail and the sale becomes taxable. Plan your replacement search before you sell.
General information only. Talk to a qualified intermediary, CPA, or tax attorney before starting an exchange.