1031 exchange - Posted by bmeesh

Posted by Robin on June 07, 2006 at 15:00:25:

Unless she puts actual cash into the closing, whatever she takes as the note will become taxable boot. She has to use all of the proceeds from her sale to buy her replacement proprety – the amount of the note would be seen as proceeds, not used to buy the new property, and it would be taxable.

1031 exchange - Posted by bmeesh

Posted by bmeesh on March 30, 2006 at 20:48:40:

I saw a property that I am interested in…the realtor said that the lady has to do a 1031 exchange…now i understand identifying another property within i think 45 days and then closing on it, but she owns this property and is selling it…i asked about seller financing or lease purchase and her accountant said no because of the 1031 exhange…can someone explain this to me…

Re: 1031 exchange - Posted by John Corey

Posted by John Corey on March 31, 2006 at 14:50:28:

There could be many reasons for the ‘no’ beside a personal preference by the accountant.

One that jumps to mind is the lady is expecting a certain amount of cash from what she is selling to be available for the purchase of the replacement property. If that cash was reduced (she held a note where you are the borrower) she would have less capital to work with on the purchase.

John Corey