1031 Exchanges with Seller Carryback - Posted by William L. Exeter
Posted by William L. Exeter on July 14, 2003 at 10:39:50:
Yes, it can be done, but not when the note pays off. The 1031 exchange must be entered into at the time the relinquished property is sold and the replacement property must be acquired within 180 days after the closing. The note (seller carry back) should be in the name of the Qualified Intermediary. The problem is what to do with the note. You can use the note as part of your payment toward your replacement property (although this is not practical), you can sell the note at a discount to generate cash (this is usually too expensive, unless you have someone that will buy it at face value) or you can essentially replace the note with your own cash or cash that you have borrowed from a third party (it like buying the note out of your own 1031 exchange account). This may have been alittle confusing, so contact me if you would like more information or to discuss further.
Diversified Exchange Corporation