What happens if you intended to effect a 1031 exchange, but the relinquished property sale closes and you receive the proceeds? In a 1031 exchange , you may not receive relinquished property sale proceeds if the transaction is to qualify as an exchange and any capital gains are therefore taxable. With cooperation of the buyer and other parties to the transaction, you may be able to rescind the initial transaction and go forward with a 1031 exchange.

Does compliance with the IRS position in these instances matter, when the exchange is not going to be carried out and the taxpayer is willing to pay the taxes? It may not matter from the taxpayer’s standpoint, but the QI is responsible for adhering to a course of conduct outlined by the Regulations and other rulings. Acting otherwise jeopardizes the QI’s position with the IRS and could jeopardize the exchanges of numerous other taxpayers.

IRS Notice 2020-23 Provides Relief for Taxpayers Affected by the COVID-19 Pandemic. Learn more about how this deadline extension for 1031 exchanges may affect you.

As a real estate investor, you may be wondering how to reduce the hassles of property management, defer capital gain and depreciation recapture taxes, potentially maintain or even increase your net cash flow, and finally retire with more free time! Arlington Capital’s Wealth Management Process is...

Accruit Senior Director Brendan Lewis Hosts Webinar, Concepts of 1031 Tax-Deferred Exchange A 1031 Exchange , also known as a Starker Trust or Tax-Deferred Exchange, is one of the most popular tax strategies available when selling and buying real estate “held for productive use in a trade or...