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constructive receipt: 1031 Exchanges - Is An Assignable Contract Necessary? - 06/12/08 01:45 PM
YES!
This issue has come up twice this week. Once on an AR blog and once in the course of my business. So here you go. . .
When a client selects a Qualified Intermediary (QI, accommodator, facilitator) and decides to open an exchange account a number of contractual things need to happen before the QI is ready to accept the clients funds from the sale of the property.
1. The Seller (client/taxpayer) will sign an exchange agreement, which essentially prevents them from having the ability to pledge, borrow or otherwise receive the benefits of the sale proceeds during the exchange period … (10 comments)
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constructive receipt: 1031 Exchanges - Why Exchangers Access to Funds Are Restricted - 04/21/08 11:28 PM
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constructive receipt: 1031 Exchanges - Are You Sure? Post #2 - 04/08/08 06:08 PM
Are You Sure You Understand 1031 Exchanges? PART 2
Commonly Misunderstood Issues in Real Property 1031 Exchanges*
In an effort to dispel 1031 Exchange Myths, I have been posting the most commonly misunderstood aspects of 1031 exchanges. You can find the first post in this series here: 1031 Exchanges - Are you Sure? Post #2
Myth #3 As long as I keep the funds separate (i.e. my attorney holds the funds, my escrow officer holds the funds, they're in an escrow account, my accountant holds the funds) and I don't touch them except for purchasing Replacement property, I have a valid exchange. This is the most … (0 comments)
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constructive receipt: 1031 Exchanges - What is A Qualified Intermediary - 04/01/08 09:51 PM
And Why Do We Need Them?
The Treasury Regulations codified the 1989 section 1031 changes in 1991. Part of those changes created a safe harbor for taxpayers using Qualified Intermediaries ("QI") to facilitate (or accommodate) their exchanges. I know, that still doesn't explain why taxpayers need to use them when they do a 1031 exchange.
One of the requirements for a valid exchange is that the taxpayer "may not have rights to receive, pledge, borrow, or otherwise obtain the benefits of money or other property." Therefore if they "receive" the money in some fashion, the exchange may be invalidated.
Receipt can occur in … (0 comments)
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constructive receipt: 1031 Exchanges - Terminology Part I - What Does a Boot Have to Do With Investment Property? - 03/12/08 09:43 PM
The unique terminology used by 1031 exchangers and their tax advisors.
BOOT: "Non like-kind" property; Taxable to the extent there is capital gain. "Like-Kind" property is property held for productive use in a trade or business or for investment."
Rule of thumb if "real property is sold" then "real property must be purchased." If "personal property is sold" then "personal property must be purchased" (note that what qualifies as like-kind property for personal property exchanges is much more narrow than for "real property"). see below.
Personal property exchanges typically involve industrial equipment, business vehicles, airplanes, livestock capable of reproducing. The property purchased as replacement property in … (2 comments)
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Lisa Lambert, Esq. (1031 Exchange Expert)
Fresno,
CA
More about me…
The Law Offices of Elisabeth A. Lambert
Address: 1222 W. Shaw Avenue, Fresno, CA, 93711
Cell Phone: (559) 433-5399
Email Me
Discussing 1031 Exchange Issues and Related Real Estate Issues in California. Specifically focusing on the Merced, Madera, Fresno, Selma, Reedley, Oakhurst,Visalia, Hanford, Porterville and Bakersfield areas.
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