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Tax
deferral through  Exchanges
offers a means to
preserve the wealth
that you have worked
so hard to accumulate
and to grow your
assets by reinvesting
the tax savings.
In a typical Forward
Delayed Exchange, the
most common type of
exchange, the taxpayer
sells business or
investment property
and acquires
Replacement Property
of equal or greater
value within 180 days.
The use of a Qualified
Intermediary ,
such as
Financial Exchange
Services , is a safe
harbor requirement to
facilitate a valid tax
deferred exchange.
This Qualified
Intermediary must
possess intimate
knowledge and a
thorough understanding
of
regulations. At
we focus solely on
facilitating exchanges
of real property, with
unparalleled quality,
expertise, and
pricing.
Skilled
Guidance Through
Before
you begin the exchange
process, be sure to
consult with your tax
or financial advisor
to ensure that a exchange
is right for you. Then
simply contact a
Exchange Coordinator
at 866.903..
Your Exchange
Coordinator will lead
you through the
process, answering
your questions and
providing guidance
along the way.
 Step
One: Sale of the
Relinquished Property
Before the sale of the
first property the
Exchanger must
complete the
documentation prepared
by .
At closing, the
proceeds are delivered
directly to ,
as the Qualified
Intermediary
Step
Two: Identification of
the Replacement
Property
The Exchanger must
identify the property
to be purchased
(generally called the
"Replacement
Property") within
45 days following the
sale of the
Relinquished Property.
The taxpayer may
generally identify
three properties as a
potential Replacement
Property, or more
under alternate rules
of identification.
Step
Three: Purchase of the
Replacement Property
The Exchanger must
obtain the Replacement
Property within 180
days following the
sale of the
Relinquished Property,
which must be
identified property,
subject to the rules
listed above. At
closing, the proceeds
are paid directly by
,
as the Qualified
Intermediary, and the
Exchanger receives the
Deed to the
Replacement Property.
There are other types
of exchanges, such as reverse
exchanges,
improvement exchanges,
and personal property
exchanges.
provides unparalleled
expertise for such
exchanges and your
Exchange Coordinator
can discuss the
specifics of your
situation with you.
Key
Rules of a Successful
Exchange
For
a successful exchange,
strict adherence to
Section
is imperative. As an
investor, it is
important that you
understand the
following rules. Your
Exchange Coordinator
can then answer any
questions you may
have.
Investment
Intent
Both the property sold
(Relinquished
Property) and the
property purchased
(Replacement Property)
must be held for
investment or
productive use in a
trade or business.
None of the properties
exchanged can be your
personal residence.
Time
Frames
Replacement
Property(ies) must be
identified within 45
days of the sale of
the Relinquished
Property and must be
purchased within 180
days of the sale of
the Relinquished
Property.
Identification
You can identify up to
three Replacement
Properties of any
value during the
Identification Period,
or more, subject to
certain conditions.
Like-Kind
The Replacement
Property must be
"Like-Kind"
to the Relinquished
Property. Any type of
real property is
Like-Kind to other
real property. For
example, a shopping
center is like-kind to
an investment
condominium and a
warehouse is like-kind
to raw land.
Common
Ownership
The party selling the
Relinquished Property
must be the same party
purchasing the
Replacement Property
or a disregarded
entity with respect to
that party.
Property
Value
You must purchase a
property of equal or
greater value to the
property sold or pay
tax on the difference.
Exchange
Values
You must use all of
the cash proceeds from
the sale of your
Relinquished Property
toward the purchase of
Replacement Property
or pay tax on the
difference. If you
offer seller financing
on your Relinquished
Property you may be
subject to tax as the
principal is repaid.
Qualified
Intermediary
To qualify for safe
harbor tax deferral,
sale proceeds must be
held by a Qualified
Intermediary between
the sale of the
Relinquished Property
and the purchase of
the Replacement
Property. |
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