1031 exchange mistakes to avoid will help novice and experienced 1031 Exchangors gain insight how to be better informed and take ownership of their 1031 exchange. With ownership, Exchangors ask better questions. The outcome of better questions is fewer if any surprises.
When Is It Too Late?
Is it too late to initiate a 1031 exchange? If you have closed and received the net proceeds of the sale, it is too late. Once you receive the proceeds it is nearly impossible to unwind the closing. When considering selling an investment property like a farm, ranch, rental property or collectible, one of the first steps is to talk with your accountant to determine whether a 1031 exchange makes sense.
After The 45th Day Can The ID Letter Be Changed?
Can the identification letter be changed after the 45th calendar day? No.
Confirm receipt of the identification letter with your qualified intermediary. The best way to avoid missing the identification deadline is to complete the task by the 44thcalendar day and follow up with the accommodator confirming receipt. Otherwise be sure to send the identification letter by fax to your qualified intermediary no later than 11:59 PM of the 45th calendar day post closing.
Postponing the 45th and 180th Calendar Days
Can the 45th and 180th calendar days be postponed? Yes. Under the following conditions, the identification and replacement periods can be extended.
- Presidentially declared disasters;
- Terroristic actions;
- Military actions or Exchangors serving in combat zones.
Requesting Exchange Funds
You want your exchange proceeds when? The best time to request receipt of exchange proceeds is:
- At the relinquished or old property closing, take a partial disbursement.
- If no replacement properties are identified by the 45th calendar day, the exchange is over and exchange proceeds are wired to your bank account.
- Exchange proceeds are held until the 180th calendar day unless used to acquire replacement property, then wired to your bank account.
Once into a 1031 exchange, the exchange proceeds cannot be received by the exchangor unless at one of the three exceptions described above. Otherwise, the accommodator could be considered an “accommodating accommodator” and taint their third party, independent status.
When considering selling real or personal property call us to discuss a 1031 exchange.
We Can Help
Atlas 1031 Exchange has been accommodating tax-deferred exchanges of all kinds for more than 17 years. We are fluent in the rules and regulations of IRC Section 1031 and able to help you navigate your exchange.
Contact us today to discuss any questions you may have. Call our office at 1-800-227-1031, email us at info@atlas1031.com, or submit your question through the online form at the top of this page.
