The good news is that IRS has issued 1031 Exchange Timeline Extensions on some 1031 deadlines. But the notice (Notice 2020 – 23) was not written like the past Disaster Relief Notices, so there may be more clarification to come.
Over the past month, three attorneys have asked the same question; When can the Exchanger receive their funds back when a 1031 Exchange transaction fails to complete properly? What are the 1031 Exchange disbursement rules?
My primary goal as a Qualified Intermediary (QI) is to ensure that our client engages in a successful 1031 exchange, resulting in deferred capital gains taxes, etc. 1031 Exchanges are not successful every single time. So what happens when the transaction hits a glitch? Many times we find ourselves dealing with a client who wants their money back right now! Sometimes, we just can’t make that happen because there are strict 1031 Exchange disbursement rules.
As the Internal Revenue Code’s Section 1031 becomes more widely known across the country, many investors are discovering the advantages of 1031 Exchange investing. Yet, some misinformed investors incorrectly believe that a Section 1031 tax-deferred exchange is a tax avoidance device for large corporations. This lack of understanding undermines one of the tax code’s most effective components
Counting correct 1031 Exchange timelines is critical to successful transactions.
Today we discuss the issue of when the 45-day (for Identifying) and 180-day (last day to close on the purchase of replacement property) timelines in a Section 1031 exchange begin.
So far this year, our office has had four clients who have had their property taken by a governmental agency through eminent domain proceedings. So, let’s briefly discuss some of the questions they should have asked and the information their financial and/or legal advisors hopefully gave them.