One thought on “How Do Simple Forward 1031 Exchanges Work?”
Arti says:
Intermediary
in an exchange account as the taxpayer cannot receive any proceeds from the sale of the relinquished property either actually or constructively. 1031(k)-1(g)(4)(iii) requires that, for an intermediary to be a qualified intermediary, the intermediary must enter into a written “exchange” agreement with the taxpayer and, as required by the exchange agreement, acquire the relinquished property from the taxpayer, transfer the relinquished property, acquire the replacement property, and transfer the replacement property to the taxpayer. The first part of the exchange occurs when the taxpayer assigns their rights to sell the relinquished property to the QI. Similar to a forward 1031 exchange, there are certain timing and documentation requirements for the reverse exchange to be valid. Upon the sale of the relinquished property, the proceeds are held by the qualified
a fewone acting to facilitate an exchange under section 1031 and the regulations. This person may not be the taxpayer or a disqualified person. Section 1. An exchange agreement between the taxpayer and the qualified intermediary (QI) must be set up prior to any sales transaction. Individual or multiple properties may be exchanged as part of a 1031 tax deferred exchange or like-kind exchange transaction.
Intermediary
in an exchange account as the taxpayer cannot receive any proceeds from the sale of the relinquished property either actually or constructively. 1031(k)-1(g)(4)(iii) requires that, for an intermediary to be a qualified intermediary, the intermediary must enter into a written “exchange” agreement with the taxpayer and, as required by the exchange agreement, acquire the relinquished property from the taxpayer, transfer the relinquished property, acquire the replacement property, and transfer the replacement property to the taxpayer. The first part of the exchange occurs when the taxpayer assigns their rights to sell the relinquished property to the QI. Similar to a forward 1031 exchange, there are certain timing and documentation requirements for the reverse exchange to be valid. Upon the sale of the relinquished property, the proceeds are held by the qualified
a fewone acting to facilitate an exchange under section 1031 and the regulations. This person may not be the taxpayer or a disqualified person. Section 1. An exchange agreement between the taxpayer and the qualified intermediary (QI) must be set up prior to any sales transaction. Individual or multiple properties may be exchanged as part of a 1031 tax deferred exchange or like-kind exchange transaction.