When you sell a real estate investment property and you have a gain, you generally have to pay tax on the gain at the time of sale. IRC Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds into a new real estate investment property as part of a qualifying like-kind exchange. Gain deferred in a like-kind exchange under IRC Section 1031 is tax-deferred, but it is not tax-free. The only way to defer the tax on the gain is complete a "1031 Exchange" and you must you an Intermediary, this is where Freedom 1031 comes in and acts as the Intermediary in your behalf so you can successfully complete the exchange.
Exchanger: Party or Entity selling /purchasing the real estate as part of the exchange
Intermediary: A party, in this case Freedom 1031, LLC, who acts in behalf of the exchanger
Relinquished Property: The real estate being sold
Replacement Property: The real estate being purchased
Title/Escrow: The closing will be conducted by a title & escrow company
Simply stated, the intermediary is there so that you as the taxpayer never "touch" or have access to the money generated from the sale of your investment property, one you have access to or "touch" the money and realize your gain the IRS can tax you on that gain.
In regards to the 1031 Exchanges we do this refers to real estate for real estate. This does not mean when you sell a vacant piece of ground that you have to purchase another piece of vacant ground to meet the like-kind requirement, the requirements are not that specific. You can sell any type of real estate and purchase any other type of real estate to meet the like-kind requirement. For example, you can sell a single family home and purchase a commercial property; or you can sell a condo and purchase vacant land.
From the recording date on the real estate you are selling you have 180 days to close (record) on the purchase of the new property. The first 45 days of the 180 days are considered the identification period of the exchange. In that 45 days the exchanger must identify a property or multiple properties that they intend to purchase.