Section 1031 Like Kind Exchange

[astroantics]

My client has farmland in Southern Illinois with a basis of $9600. He wants to sell the land and expects to realize about $150,000. He wants to use the proceeds plus boot to buy a larger plot of farmland. Sounds like a straight forward 1031, right? Here's the fly in the ointment.

When he came to me I explained the Section 1031 rules and the need for a qualified intermediary. I located a firm called Exeter who would handle the exchange for $795.00. Then came the problems.

The sale of his land was delayed due to easement problems. The farmland he wants to purchase is selling at auction on December 12. He asked me if he could purchase the farmland from his funds and then sell his property within the time frame allowed (a reverse exchange). Exeter advised me that he could do this, but their fee for a reverse exchange would be $6500! Their reason for the increase was due to a more complicated transaction and additional liability.

My questions are first, can anyone recommend another qualified intermediary, and second, if the 1031 can't be done, what might be his options to reduce his taxable gain. He's owned the farmland since 1989, and no improvements have been made.

Thanks for any help with this.

[BHoffman]

2 of my clients have used First American Exchange and were satisfied with the service. I'm not affiliated in any way with the company.

http://firstexchange.com/

[Roland Slugg]

Ncs

I have personally used "NCS 1031 Exchange Professionals" three times for my own exchanges. All three exchanges were handled on time and with zero mistakes. Highly recommended!

https://www.ncs1031.com/ncs10312index.cfm

[Burke]

He asked me if he could purchase the farmland from his funds and then sell his property within the time frame allowed (a reverse exchange).

No, this would disqualify the 1031. He must go through an intermediary.

[Lion]

Intermediary

I don't think an intermediary is a must. But, touching the funds is a big no-no. So, if there's to be an escrow and someone to help watch the clock, the deadlines, it may as well be someone who does that for a living, knows the law, handles exchanges all the time.

[Davc]

I don't think an intermediary is a must..

An intermediary is a must for anything other than a direct swap. A reverse exchange requires that the intermediary acquire the property being exchanged for and hold it until the preoprty beng given up has been sold by the intermediary.