Is it too late to do a 1031 exchange if my closing is tomorrow? Sometimes we get calls from people that are at the closing table doing a sit-down closing and then it occurs to them that they should do a 1031 exchange and they say "stop the presses everyone we've got to put this on hold so I can call my qualified intermediary!"
Jumping into Action
When that happens, we quickly prepare the 1031 documents and email them to the closing table so that we can have the documents signed concurrent with the transaction.
We can't, however, paper a 1031 exchange on a transaction that has already funded and closed. So can we stop the presses and put the closing on hold to get the 1031 documents put in place? Yes we can. Is that very irregular? Does it cause a lot of consternation and difficulty for the other parties involved? It is inconvenient to put everything on hold but that doesn't really matter when your taxes are on the line and you’ve got to figure out a way to defer those taxes.
Do we get calls at the last minute? Yes. but it's much better if you can have the forethought to get your 1031 exchange arranged, set up well in advance of closing, and even pre-sign your 1031 documents well before you transfer the benefits and burdens of ownership to your buyer.
Warning – Once the benefits and burdens of ownership have shifted; and the conveyance has taken place, and the buyer’s money has been paid to the title company, it is probably too late.
- 1031 Hotline: If you have questions about 1031 exchange funds and timelines in Minnesota, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
© 2016 Copyright Jeffrey R. Peterson All Rights Reserved