1031 exchange questions

[Account Closed]

Hello all,

I have a couple of questions about completing a 1031 exchange. 

1. The property being sold is under contract and scheduled to close in a couple of weeks. Can I begin making offers on new properties to buy or do I have to wait until the sale is complete? 

2. Regarding the need to identify 3 potential properties to buy within 45 days of closing on sale of the initial property: Can these properties by "identified" (or given to the 1031 agent) after an offer is accepted or do I have to identify 3 potential properties before I begin making offers?  My concern is that I could identify 3 properties that I like and all three offers get rejected. I realize that you can potentially identify more than 3 properties within the 45 day window. But it seems more efficient to get a property under contract and then identify it as one I intend to use to complete the 1031 exchange. I'm assuming the 1031 language can be added as an addendum after the property is under contract and the information has been sent to the exchange agent.  Is this possible?

Thanks in advance for any information provided.

Seleem

[Stephanie Martinson]

Hi Saleem,

I am not a tax expert, nor am I an accountant, but I have done a 1031 on a property, and honestly it is pretty easy.  I would just make a call to your accountant, and he/she will tell you exactly what you need to do.  In the meantime, I can give you a broad overview...

1) You can make an offer now, and at closing the money from your property being sold will just roll over to your new property.

2) I believe the identifying 3 properties within 45 days is just to make sure that you are actively looking for properties within the given window.  I don't think you need to look for them all as a prerequisite or anything.  

Good luck! I hope that helps.

Steph Martinson

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