This is the third of three blog entries about the basics of Section 1031 exchanges. The first entry can be found here, Article #1, and the second entry is here: Article #2.
Quick review... the first hurdle for the standard exchange is that the properties must qualify. Second, you must establish your intent to exchange in writing prior to closing of the property you are relinquishing. Third, you must identify the property you intend to purchase using the guidelines allowed. Moving on to the final requirement...
#4 - Acquire the replacement property. Again going back to the date of closing of the property you sold, you must acquire (close on) your replacement property within 180 days following that date. At closing, the funds in your exchange account are paid directly from the exchange company to the closing agent.
This summarizes the most common type of exchange, referred to as a delayed exchange. Other exchange structures are possible, such as reverse exchanges (buy the new property before selling the old one), construction and improvement exchanges (build or improve the new property with proceeds from the sale of the old one), and exchanges of business assets (non-real-estate exchanges),
It is critical that exchange rules be followed carefully; to do otherwise will cause the exchange to fail. You should align yourself with a qualified exchange company that understands the intricacies of Section 1031 requirements. Employing a company that demonstrates knowledge of exchange regulations, is engaged in the exchange industry on a full-time basis, and supports the industry and the protection of consumers through membership in the Federation of Exchange Accommodators is the best way to ensure a successful result with your exchange.
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Please consider IOWA EQUITY EXCHANGE as your source for answers to your questions about Section 1031 like-kind tax-deferred exchanges. Contact us at your convenience for prompt, accurate information. Please think of us for your next exchange
Ken Tharp
800-805-1031 toll free
Providing Qualified Intermediary services for Section 1031 tax deferred exchanges all over the United States. Headquartered in Iowa, our services are available in Missouri, Kansas, Nebraska, Colorado, North Dakota, South Dakota, Minnesota, Wisconsin, Illinois, and all other states.
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Copyright © 2009 By Ken Tharp, All Rights Reserved. * Section 1031 Exchanges - The Basics (Article #3) * Contact Ken Tharp for information on Section 1031 tax-deferred exchanges anywhere in the United States.
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