You Don't Have To Commit To Your Exchange Under Section 1031

You Don't Have To Commit To Your Exchange Under Section 1031 - By: Trisha Coppley, Posted on: 2008-06-22

The process of a 1031 exchange is one that should be entered into with a good deal of pre-planning and foresight; it presents the unwary property investor with ample opportunity for costly errors. With this in mind, you might be hesitant to begin a 1031 exchange without a certainty that you'll be able to follow it to completion. In reality, however, the perils of beginning the 1031 process don't have to be as intimidating as they might, at first, appear.

Beginning the 1031 process isn't by any means a permanent commitment – in all actuality, many smart real estate investors, when selling an investment property will start the 1031 exchange process just to leave their options open. This is because, if one begins with the intent of exchanging, there are several opportunities to change one's mind and simply sell the property, while starting out along the path of selling outright completely surrendering the option of a 1031 tax exchange.

There is actually no reason to be afraid of the possibility of changing your mind in the course of an exchange. All you actually have to do in order to keep your options open is to be aware of the deadlines involved in the process of an exchange, as they will be the major determining factor of when you'll get the chance to receive the proceeds that would've been put towards your replacement property had you elected to go through with your exchange.

After closing on the sale of your relinquished property, the proceeds are sent directly to your qualified intermediary. Once this has occurred, the the first opportunity you will have to take back your money from your qualified intermediary is at the end of the ensuing forty-five days, by which point you are supposed to have identified a suitable replacement property. If forty-five days have come and gone without your having identified a replacement property, the exchange will automatically be terminated and you'll be able to receive the proceeds of the initial sale. If you have identified a replacement property prior to deciding that you do not want to go through with your exchange, just revoke the identification before the end of the 45 day period, and the exchange will end.

If you're past this step in the process, the next opportunity to collect your proceeds will be 180 days from the end of the 45 day period, which is the deadline for closing on a replacement property. However, if your federal income tax return occurs during the 180 days, you can shorten this time frame. As long as you don't request an extension on your return, you may, at this point, inform your qualified intermediary that the exchange has been terminated and receive your {money.

In the end, it is always a good idea to be prepared for whatever contingencies might arise; starting the 1031 process when you're uncertain what the future may hold can, in fact, be a good way to keep all of your options open. As long as you make sure to keep aware of the deadlines involved in the process, you are at liberty to back out of your exchange if your circumstances change.

Article Source:- Directory Submission & Sexy Deepika Padukone

Maximize Your Tax Savings By Using A Reverse 1031 Exchange When Buying Or Selling Like Kind 1031 Exchange Real Estate. Visit www.Top1031Exchange.com To Learn More.

Please Rate this Article

Not yet Rated

Click the XML Icon Above to Receive Taxes Articles Via RSS!

Additional Articles From - Home | Finance | Taxes

Link building Service
Directory Submission Service
Seo Services Company
Article Syndication

	Print This Article
	Post Comment
	Add To Favorites
	Email to Friends
	Ezine Ready

Submit Articles
Member Login
Top Authors
Most Popular Articles
Submission Guidelines
Ezine Notifications
Article RSS Feeds

Yoga's World
All Information On Yoga

Top Authors
Most Popular Articles
Submission Guidelines
Ezine Notifications
Article RSS Feeds

New Stuff
About Us
Site Blog
Forum
Link to Us
Contact Us
Privacy Policy
Terms of Service

Ezine Article
Article Directory

EzinesArticle.Com » Copyright © 2006 ~ All Rights Reserved.
Terms of Service | Submission Guidelines | Contact Us | Link to Us