How does a 1031 exchange work?

Under Section 1031 of the Internal Revenue Code, owners of investment property can sell their real property and defer capital gains taxes on the sale proceeds by purchasing a “like-kind” real property through a Qualified Intermediary within 180 days of the original sale.

In order to complete a like-kind exchange, you will need a Qualified Intermediary to hold the sale proceeds from the time you sell your property until the time you purchase a replacement property. 1

Use our Qualified Intermediary.

With City National Bank as your Qualified Intermediary, your sale proceeds will be safe and earning interest for you.

  • We’ll invest your exchange funds into a City National Bank Money Market Account; any interest earned will be credited to your account.
  • Your funds will be FDIC insured up to the stated limit.
  • Most institutions operate their exchanges through a subsidiary — we’ll serve directly as your Qualified Intermediary.

Save time and money.

Our professionals have decades of experience successfully accommodating 1031 exchanges. As your Qualified Intermediary, we work to reduce your costs and minimize the risks of improperly handled funds.

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City National, as a matter of policy, does not give tax, accounting, regulatory, or legal advice. All decisions regarding the tax or legal implications of your investments should be made in connection with your independent tax or legal advisor.