1031 Exchange and Improvements

[Lee Hughes]

I have a 1031 Exchange going. We put an offer in on an identified home. We have about $40,000 left over, meaning the home we made an offer on was less than the 1031 Exchange amount.   The home, as-is, can work but it needs improvements and updating.  The 1031 Exchange people say the sellers must do the improvements BEFORE closing.  Because of the weather and contractors schedule, it doesn't look like it can be completed in time.  We don't want to pay taxes on the excess.

Just wondering....how close do the 1031 people check the HUD-1? For example, can I bump up the sales price and get a check at closing to cover the improvements?

Can I bump up the sales price, contract with the contractors and they get paid from closing?

Any other ideas other than extending the closing date?

[Bob B.]

@Lee Hughes. Now you know in the future to only work with Dr. 1031 @Dave Foster.