If you want to take some boot during a 1031 exchange, you can do so. The time to take boot in a 1031 exchange is at the closing of the relinquished property or at the end of the exchange.
During the closing of the relinquished property, you can take some non-1031 proceeds and we would augment our 1031 documents and closing instructions to specify the closing agent is supposed to give you a certain amount of cash boot. You can also take boot at the end of the 1031 exchange period. After you’ve acquired all of your replacement properties, if there is unused funds left in the qualified intermediaries hands at the end of the exchange, we can release those unused funds to you.
But remember – these funds will be boot, or non-like-kind property that you receive during a 1031 exchange. Receiving boot triggers the recognition of gain on the cash you receive. It will create some inefficiency. But remember – 1031 exchanges are not a zero-sum game. You can do a partial 1031 exchange.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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