Chayavanessen's Blog

If you want to perform an exchange that is fully tax deferred, you must meet three simple requirements:

1.  Reinvest the entire net equity – net proceeds – in one or more replacement properties;

2.  Acquire one or more replacement properties with the same or a greater amount of debt; AND

3.  Do the above within a certain amount of time (see below).

Here’s what you need to do:

• Review every transaction with tax and/or legal advisors.
• When entering into an “assignable” sale contract and before closing, immediately notify your Accommodator/Intermediary to initiate the exchange transaction.
• All proceeds from the sale involved in the exchange transaction must be transferred directly to the Accommodator.
• Identification Period:  Both the 45-day identification period and exchange period begins. Although it is the sole responsibility of the exchanger to meet all identification rules, your Accommodator will typically keep you informed of the timelines for the 45-day identification period and the 180-day (or the date the tax return is due, whichever is earlier) exchange period, the idenfication requirements and the identification rules.
• Identified Property:  The replacement property needs to be identified by midnight of the 45th day.
• Enter into an “assignable” contract to purchase the replacement property.
  
• Stay in touch with your Accommodator:  more documents will have to be filled out.
• The replacement property closes.

If all exchange funds are used to acquire the replacement property or properties and all the exchange requirements are met, the exchange is complete.

For more information or to find an Accommodator, contact Chaya van Essen at Teles Properties in Beverly Hills, California:

(310) 270-6305 or chaya.vanessen@telesproperties.com or www.chayavanessen.com