1031 tax exchange...,

[Carson Plant]

I have been working on selling a property and then reinvesting into another one. I’m supposed to close on both properties on same day but the one I’m selling just called and put off sale unit a week after I close on the property I’m buying. My question is can I still do the 1031 exchange? I tried putting off the property that I am buying but I can’t so will have to close on it now before I sell the property. I also my taxes lady said as long as it in the 45 days I can do it but I’m not sure about that.

[Dave Foster]

@Carson Plant, Yeah, all the kind words aside (btw believe none of what you hear and only half of what you see :)  you've got a couple of issues that will hang you up if you're not careful . 

The first one was correctly sussed out by @Wayne Brooks, Even in a same day closing scenario you are deemed to have constructive and actual receipt of the proceeds if there is not a Qualified intermediary documenting and directing the process.  In 2012 there was a specific ruling where a client didn't even move the money from one title company to another.  But because there was no QI he was deemed to be in control of the money that just sat in the title company escrow - exchange disallowed.  So you do need a QI in place before you close your sale.

Second to that and what you were asking about is that you cannot take title to the replacement property prior to completing the sale of the old property.  The 45 day thing being referenced by your tax lady doesn't have anything to do with the order of the exchange.  She's referring to the fact that you have 45 days after the closing of your sale to identify your potential replacements.

If you cannot move the sale up or the purchase back then you only have one option - And that would be a reverse exchange.  A reverse exchange does not change the statutory order of sell then buy.  But it is a specific IRS procedure (Rev Proc 2000-37) where your QI takes title to the new property and holds it until your old property sells.  This way you're still selling first and buying second.  But the QI is holding it for you.  

These are more complicated and more expensive.  But if your gain is enough they can be very worth your while.