FREQUENTLY ASKED QUESTIONS ABOUT 1031 EXCHANGES

DO MY BUYER AND SELLER HAVE TO COOPERATE?
No, the regulations simply say that your buyer and seller must be notified in writing of your intent to effect an exchange. However, most buyers and sellers are very cooperative because the exchange has ryo effect on their property.

WHEN IS THE BEST TIME TO RETAIN AN INTERMEDIARY?
The best time to retain an Intermediary is when you are in the planning stages.

This allows us ample time to notify all parties and affords you the opportunity to carefully review all documentation well in advance.

WHEN IS IT TOO LATE TO EFFECT A 1031 EXCHANGE?
Once you settle on your relinquished property (convey title and receive sale proceeds), its too late. Therefore, contact an Intermediary prior to closing/escrow.

CAN I CLOSE ON MY REPLACEMENT PROPERTY BEFORE I FIND A BUYER FOR MY RELINQUISHED PROPERTY?
Yes. This exchange process is known as a REVERSE EXCHANGE. For more information on Reverse Exchanges, contact 1031 Corp. via e-mail or call toll-free 1-800-828-1031.

CAN I MAKE IMPROVEMENTS ON MY REPLACEMENT PROPERTY?
Yes. Construction/improvement Exchanges are a very viable option to exchangers. However, they require advanced planning. For more information on Construction/Improvement Exchanges, please contact 1031 Corp. via e-mail or call toll-free 1-800-828-1031.

IS THERE ANY LICENSING REQUIRED TO BE AN INTERMEDIARY?
Unfortunately, there is no licensing required to be an Intermediary, except in the state of Nevada. 1031 Corp. welcomes the idea as it would eliminate the many ill advised who are attempting to facilitate exchanges.

HOW DO I KNOW WHAT INTERMEDIARY TO CHOOSE?
You should choose a solid corporation specializing in Section 1031.

The Intermediary should be staffed by well informed professionals with the experience and expertise to facilitate even the most complex exchange transactions.

An Intermediary should be able to provide you with a list of client references.

CAN I TAKE SOME CASH OUT OF AN EXCHANGE?
Yes, the exchanger is permitted to receive some of the equity or taxable "boot." However, be sure to discuss this with your Intermediary prior to going to closing of your relinquished property.

CAN I EVENTUALLY USE THE REPLACEMENT PROPERTY FOR MY PRIMARY RESIDENCE OR VACATION HOME?
Yes, but you must meet the holding period requirement prior to converting use of the property.

The IRS has not specifically stated how long the holding requirement is but we recommend maintaining a one to two year holding period prior to selling or converting its use.