My client is the only party interested in qualifying. Can he sell his property for $150k, park the proceeds with an intermediary, add $50k cash to buy a $200,000 property, identify and close within the alotted time and qualify for 1031?
-
-
No, he can't
>>Can he sell his property for $150k, park the proceeds with an intermediary, add $50k cash to buy a $200,000 property, identify and close within the alotted time and qualify for 1031?<<
No, he can't. But he can assign his sales contract to the intermediary, trade the property to the intermediary with an additional 50K, let the intermediary sell for 150K, instruct the intermediary to purchase the 200K property, and receive the replacement property from the intermediary to complete the trade. If done within the allotted time, that would qualify. -
Sec 1031
Agree with above. Anytime there is constructive receipt or control of cash in a Sec 1031 exchange you will have a taxable event. Restriction by contractual arangement with a qualified intermediary in generally the best way to go.Comment
-
Agree with Jainen..with a qualified intermediary is the ONLY way to go (according to the rules to avoid a taxable transaction) unless it is truly an exchange between only 2 parties.Comment
-
not the only option
>>the ONLY way to go (according to the rules to avoid a taxable transaction)<<
An intermediary is useful, but it is certainly not the only option allowed. It's not even the only safe harbor.Comment
Comment