1031 exchange for San Diego apartment owners Sell your apartment building and defer the tax, explained in plain English.
A 1031 exchange can move your equity into property you don't have to manage. Here's how it works, and what it would look like for your building.
- The 45-day and 180-day rules, simply
- Hands-off replacement options and their income
- Your estimated tax deferred
- We work with your CPA and intermediary
Get your 1031 options
Your building's value, the tax a 1031 could defer, and 2–3 replacement options.
The timeline
Two deadlines run from the day your sale closes
| Day | What has to happen |
|---|---|
| Before listing | Talk to your CPA, choose a qualified intermediary, and start looking at replacement options |
| Day 0 | Your building closes; the intermediary holds the money |
| Day 45 | Replacement properties identified in writing (usually up to three) |
| Day 180 | Replacement purchase closed |
Where owners land
Three common replacement choices
Another apartment building
More units, a newer building, or a market with less regulation. You're still a landlord, but possibly a less busy one.
Net-lease property
A building leased to one business, like a pharmacy or clinic, which pays most expenses. Little management, but your income depends on one tenant.
Delaware Statutory Trust
A share of a large professionally managed property. No management at all, but no control and a multi-year hold.
Thamis GallanisBroker-Manager · CA DRE 01011756Who you'll talk to
You talk to the broker, not a call center.
Thamis Gallanis has spent 28 years in San Diego real estate: selling buildings, managing them, and advising the families who own them. Before that, he worked as a Resolutions and Receivership Specialist with the FDIC, taking over the real estate of failed banks and deciding, asset by asset, what to fix, what to hold and what to sell.
That job taught him to look at a building the way a lender or a buyer will, and to give owners a straight answer. Sometimes the right answer is to sell. Sometimes it is to fix the management and keep collecting rent. He'll tell you which.
- 28 yearsSan Diego sales, management and leasing
- FDICReceivership and asset-disposition background
- Broker-ManagerCA DRE 01011756
- North Park office4326 Oregon St, Unit 10
Questions owners ask us
What is a 1031 exchange?
Under Section 1031 of the tax code, you can sell investment real estate and buy other investment real estate of equal or greater value, deferring capital gains and depreciation recapture tax. A qualified intermediary must hold the sale money; you can't touch it.
What are the 45-day and 180-day rules?
From the day your sale closes, you have 45 days to identify replacement properties in writing and 180 days to close on them. The deadlines are strict and are not extended for weekends or holidays.
Can I exchange my apartment building into something I don't have to manage?
Yes. Common choices are a single-tenant net-lease property, where the tenant pays most expenses, or a share of a Delaware Statutory Trust, where a sponsor manages everything.
Do I have to buy something more expensive?
To defer all the tax, you generally need to buy property of equal or greater value and reinvest all the cash. Anything you take out or don't replace may be taxable.
Can I exchange into property outside California?
Yes. California will still track the deferred gain on the California building and may tax it when you eventually sell the replacement property, so your CPA will file a yearly form.
What does it cost?
Qualified intermediary fees are typically modest compared with the tax deferred. The bigger cost is choosing a weak replacement property under deadline pressure, which is why we line up options before your building is listed.
Talk it through with the broker
No obligation, no sign in the yard, no word to your tenants.