Contact Us: 719.964.3284
Have a property you are selling, and looking at a significant tax liability?
Contact us about a 1031 Exchange at 719-964-3284
What is a delayed exchange?
SALE OF THE RELINQUISHED PROPERTY
Prior to or at the closing the sale of the Relinquished Property, the Investor enters will enter into the Exchange Agreement with the exchange company selected by JA Capital Investments. In accordance with the Exchange Agreement, Investor will assign its rights under the sales contract to the exchange company. Notwithstanding this assignment, the exchange company instructs the closing/escrow officer or closing attorney to directly deed the Relinquished Property from Investor to the buyer. In other words, in a delayed exchange, the exchange company will never take title to either the Relinquished Property or the Replacement Property. The Exchange Proceeds are transferred directly to the exchange company from the sale, thereby protecting the Investor from actual or constructive receipt of funds.
IDENTIFICATION OF REPLACEMENT PROPERTY
Investor must properly identify potential replacement property the exchange company within 45 calendar days from the closing on the Relinquished Property. The identification must adhere to the strict identification rules set forth in Section 1031 of the Internal Revenue Code.
PURCHASE OF THE REPLACEMENT PROPERTY
Investor has a total of 180 calendar days from closing of the relinquished property, or their tax filing date for the tax year in which the sale of the Relinquished Property occurred, whichever is earlier, to acquire the “like-kind” Replacement Property the exchange company identified within the 45-day identification period. Prior to closing on the Replacement Property, Investor will assign Investor’s rights under the purchase contract for the Replacement Property to the exchange company. The exchange company will transfer the Exchange Proceeds to the closing/escrow officer or closing attorney handling the purchase of the Replacement Property and this amount will be credited against the purchase price. As with the Relinquished Property, the exchange company will instruct the closing/escrow officer or closing attorney handling the purchase to have the deed to the Relinquished Property transferred directly from the seller to Investor.