A lot of individuals are only aware of the basic functioning of the 1031 real estate exchange. There are a lot of misconceptions related to the exchange. Due these misconceptions, several investors fail to get the full benefit of this procedure.
Through this blog post, we discuss these misconceptions.
The attorney can act as a Qualified Intermediary
Your attorney or CPA cannot handle the exchange on your behalf if he/she has provided accounting or legal services to you in the last two years.
“Like-kind” refers to similar type of property
This is another misconception due to which the investors don’t explore other options. In reality, if you are selling a commercial office building, you can purchase a raw land. The “like-kind” means that if you are selling real property, you can’t purchase artwork or aircraft.
The exchange has to happen simultaneously
It is not compulsory that selling and buying have to happen at the same time. This is why most of the exchanges fall under “delayed exchange” category. In this type of exchange, middleman (known as Qualified Intermediary) holds the proceeds on your behalf. The QA uses the proceeds for buying replacement property that you have finalized for the exchange purpose.
It is vital to get a help of an advisor who guides you through the whole process. FAI Exchange is one trusted firm that not only helps you in the process but also finds suitable replacement property for you. This firm has already helped various investors from Massachusetts in 1031 real estate exchange.
Read more about the services of the company here.
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