Dear valued clients,

I recently received a call from an individual who stated they closed in Florida and were ready to "Set-up their 1031 Exchange.” Unfortunately for them, they were disqualified due to timing.

IMPORTANT TO NOTE: 1031 exchanges MUST be set up prior to closing.

During a transaction, should the taxpayer indicate they are completing a 1031 exchange, CHECK THE SETTLEMENT STATEMENT FOR A QUALIFIED INTERMEDIARY ACTING ON BEHALF OF THE SELLER. If there is no mention of a qualified intermediary, call us to set it up immediately. We simply need a copy of the contract and title commitment, to contact the seller and qualify the exchange, then send the exchange documents and instructions to you.

Sadly, in the last month I have spoken to seven people who wanted to complete 1031 exchanges, but had already closed. It is disappointing to explain to them they cannot complete the exchange.

IRC 1031 does NOT ALLOW “Constructive receipt of the funds to the taxpayer (seller).” Once closed, they are in fact in constructive receipt. If you or your client have a qualified intermediary, they should be communicating directly with the closing office and submitting instructions pertinent to the 1031 exchange.

Please contact me with questions and always remember THE EXCHANGE MUST BE SET UP PRIOR TO CLOSING.

BRENDA MULLER
Florida Division Manager

ASSET PRESERVATION, INC.
515 E. Las Olas Blvd. Suite 120, Fort Lauderdale, FL 33301
O 844.252.1031 | C 954.329.9202 | F 954.827.2325
HQ 800.282.1031 | NY 866.394.1031
apiexchange.com | brenda@apiexchange.com
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Asset Preservation, Inc., does not give tax or legal advice. The information contained herein should not be relied upon as a substitute for tax or legal advice obtained from a competent tax and/or legal advisor.

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