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Replacement PropertyNote: The information provided herein has been collected from the IRS Website and is not guaranteed or endorsed by Bob and Linda Lario. For more information, please contact www.irs.gov or a 1031 exchange qualified intermediary. If, before you receive the replacement property, you actually or constructively receive money or unlike property in full payment for the property you transfer, the transaction will be treated as a sale rather than a deferred exchange. In that case, you must recognize gain or loss on the transaction, even if you later receive the replacement property. (It would be treated as if you bought it.) You constructively receive money or unlike property when the money or property is credited to your account or made available to you. You also constructively receive money or unlike property when any limits or restrictions on it expire or are waived. Whether you actually or constructively receive money or unlike property, however, is determined without regard to certain arrangements you make to ensure that the other party carries out its obligation to transfer the replacement property to you. For example, if you have that obligation secured by a mortgage or by cash or its equivalent held in a qualified escrow account or qualified trust, that arrangement will be disregarded in determining whether you actually or constructively receive money or unlike property. For more information, see section 1.1031(k)-1(g) of the IRS regulations. Additional Resources Publication 544, Sales and Other Dispositions of Assets Form 8824, Like-Kind Exchanges (PDF) Contact Bob and Linda Lario today for Colorado Ranch Land, Mountain Homes and Land, and Real Estate Acreage in Western Colorado! |
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