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Can I 1031 Exchange into shares of a Real Estate Investment Trust (REIT)?

April 26, 2017Investment Real Estate REIT Shares Trust

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Can I 1031 Exchange into shares of a Real Estate Investment Trust (REIT)?

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Yes. Section 721 of the Internal Revenue Code (721 Exchange) allows you to exchange into a REIT. This transaction is generally referred to as an “upREIT” or “721 Exchange.” However, it is very important to note that the 721 Exchange disallows you from doing any subsequent exchanges back into real estate, thus ending the 1031 exchange life cycle.