Fairhaven Realty
Fairhaven Realty, a br of Lakeway Realty, Inc.
Q & A - 1031 Exchanges
Posted on January 15, 2010
The winds have abated and we’re seeing a patch of blue sky here at Fairhaven Realty on this Friday, January 15, 2010 in Bellingham, WA. I guess we better enjoy it while it’s here - more clouds and rain are predicted for the weekend.
Creative Puns for “Educated Minds”
- A rubber band pistol was confiscated from algebra class because it was a weapon of math disruption.
- A sign on the lawn at a drug rehab center said: “Keep off the Grass.”
- A chicken crossing the road is poultry in motion.
QUESTIONS AND ANSWERS ON 1031 TAX EXCHANGES (continued from previous blogs).
If a taxpayer has already signed a contract to sell the relinquished property, is it too late to start a tax-deferred exchange?
No, as long as the taxpayer has not transferred title, or the benefits and burdens of the relinquished property, she/he can still set up a tax-deferred Exchange. Once the closing occurs, it is too late to take advantage of a Section 1031 Tax-deferred Exchange (even if the taxpayer has not cashed the proceeds check).
Does the Qualified Intermediary actually take title to the properties?
No, not in most situations. The IRS regulations allow the properties to be deeded directly between the parties, just as in a normal sale transaction. The taxpayer’s interests in the property purchase and sale contracts are assigned to the QI. The QI then instructs the property owner to deed the property directly to the appropriate party (for the relinquished property, its buyer; for the replacement property, taxpayer).
No, not in most situations. The IRS regulations allow the properties to be deeded directly between the parties, just as in a normal sale transaction. The taxpayer’s interests in the property purchase and sale contracts are assigned to the QI. The QI then instructs the property owner to deed the property directly to the appropriate party (for the relinquished property, its buyer; for the replacement property, taxpayer).
*Information gathered/quoted from the National Association of REALTORS® online library-1031 Exchange
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