1031 exchange window closing - Posted by Jim N

Posted by William L. Exeter on August 30, 2003 at 15:34:01:

This is a difficult situation and absolutely requires the advice of legal counsel. However, the taxpayer should be aware that if they go forward with the 1031 exchange after the 180 days, knows that it does not qualify for 1031 exchange treatment and report it as an exchange on their tax return they have committed tax fraud.

I do have one thought. Are you in a position to carry back the paper on a very short term basis pending final funding of the lender? You might be able to quickly structure the transaction so that you carry the financing, execute a grant deed and deliver the grant deed to the taxpayer (considered legal conveyance even though it is not recorded in some states) and essentially close the deal prior to the 180 days. The requirement is that the taxpayer must acquire and receive legal title to the replacement properties no later than 180 calendar days from the close of their sale escrow.

Also, I would strongly suggest legal review prior to completing this, although that will be difficult on a holiday weekend.

Good luck.

Bill Exeter
Diversfied Exchange Corporation

1031 exchange window closing - Posted by Jim N

Posted by Jim N on August 30, 2003 at 11:16:30:

Here’s the problem. I have an investor purchasing 3 properties from me by way of a 1031. My lender has had problems with the financing and now the 180 day window is closed September 1st. Two questions:

  1. If investor moves forward with transactions despite the possible tax implications, what are the chances he gets audited

  2. Is it possible to transfer title before funding comes through and simply record later.

Thanks,

Jim

These are questions for an attorney. NT - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on August 30, 2003 at 12:20:07:

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