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  • Find the Right Qualified Intermediary to Facilitate Your 1031 Exchange

    Find the Right Qualified Intermediary to Facilitate Your 1031 Exchange

    As with most service industries, not all Qualified Intermediaries (QIs) are created equal, nor do all QIs service their clients with the same standards and expectations in place. Below is a list of criteria you should evaluate prior to selecting a Qualified Intermediary to facilitate your 1031 exchange.

    Bigger Isn’t Always Better
    It is easy to assume that the largest company might be the best option, but that is seldom the case. We estimate that roughly 30% of the Live Chats we received through our website are from individuals and tax advisors that have a 1031 exchange open with a different QI but are unable to get in touch with them to answer their time sensitive questions in relation to their 1031 exchange, and so they reach out to us.
     
    Easy Accessibility
    Today’s consumer wants accessibility at their fingertips, and with today’s technology why shouldn’t they get it? When evaluating QI options, pay special attention to how easily you will be able to contact them in the future.
     

    Do they have a (800) number? Does a real person answer the call without you having to push several buttons to navigate an automated system? Will you have the ability to speak with an attorney, Certified Exchange Specialist®, or other subject matter expert regarding thorny situations?
     
    Do they have a live chat on their website, with a real specialist on the other end available to quickly answer your questions?
     

    QI Roster
    A QI is only as good as its employees. When researching your QI options, look into the breakdown of their internal team.
     

    Do they have on-staff attorneys specializing in 1031 Exchanges? Not all 1031 exchanges are cut and dry; some have complex aspects and nuances that require a specialized 1031 exchange attorney to ensure validity regarding IRC 1031. If the QI doesn’t have on-staff attorneys, you can expect delays and sometimes increased fees to bring in outside council.
     
    What is their largest department? If it is not the Service department, then you might infer service isn’t their priority. A QI set-up with an adequate service and processing team will be set-up for successfully processing 1031 exchanges.
     

    You Get What You Pay For
    As with most things, when it comes to a 1031 exchange, you get what you pay for. Pricing is often reflective of the level of personal attention you will receive throughout the process. Companies that offer the lowest price do so by offering minimal touchpoints with their clients, and often minimal experience among their staff. Their goal is quantity, not quality. Similarly, companies that offer flat-rate pricing are not considering the unique aspects that accompany most 1031 Exchanges. 1031 Exchanges are not one size fits all and therefore a flat-rate pricing model doesn’t work.

    If you are looking to start a 1031 Exchange, we encourage you to reach out to various QIs and then evaluate their overall service offerings. Ask yourself the following questions of each QI: Were they easy to get ahold of via phone, live chat, email? Did they offer 1031 Exchange information and answers without charge? Do they have sufficient expertise and servicing team members?
    At Accruit, we pride ourselves on providing the world class customer service with a consistent Net Promoter Score of over 80; we have received over 200 5-star Google reviews from our valued clients; and perhaps most telling, over 93% of our clients are repeat customers or direct referrals from other companies within the real estate industry. Additionally, Accruit has five on-staff attorneys that are 1031 exchange subject matter experts boosting over 100 years collective experience.
    If you have any questions or would like more information on our 1031 Exchange services, please reach out to us today!

  • Find the Right Qualified Intermediary to Facilitate Your 1031 Exchange

    Find the Right Qualified Intermediary to Facilitate Your 1031 Exchange

    As with most service industries, not all Qualified Intermediaries (QIs) are created equal, nor do all QIs service their clients with the same standards and expectations in place. Below is a list of criteria you should evaluate prior to selecting a Qualified Intermediary to facilitate your 1031 exchange.

    Bigger Isn’t Always Better
    It is easy to assume that the largest company might be the best option, but that is seldom the case. We estimate that roughly 30% of the Live Chats we received through our website are from individuals and tax advisors that have a 1031 exchange open with a different QI but are unable to get in touch with them to answer their time sensitive questions in relation to their 1031 exchange, and so they reach out to us.
     
    Easy Accessibility
    Today’s consumer wants accessibility at their fingertips, and with today’s technology why shouldn’t they get it? When evaluating QI options, pay special attention to how easily you will be able to contact them in the future.
     

    Do they have a (800) number? Does a real person answer the call without you having to push several buttons to navigate an automated system? Will you have the ability to speak with an attorney, Certified Exchange Specialist®, or other subject matter expert regarding thorny situations?
     
    Do they have a live chat on their website, with a real specialist on the other end available to quickly answer your questions?
     

    QI Roster
    A QI is only as good as its employees. When researching your QI options, look into the breakdown of their internal team.
     

    Do they have on-staff attorneys specializing in 1031 Exchanges? Not all 1031 exchanges are cut and dry; some have complex aspects and nuances that require a specialized 1031 exchange attorney to ensure validity regarding IRC 1031. If the QI doesn’t have on-staff attorneys, you can expect delays and sometimes increased fees to bring in outside council.
     
    What is their largest department? If it is not the Service department, then you might infer service isn’t their priority. A QI set-up with an adequate service and processing team will be set-up for successfully processing 1031 exchanges.
     

    You Get What You Pay For
    As with most things, when it comes to a 1031 exchange, you get what you pay for. Pricing is often reflective of the level of personal attention you will receive throughout the process. Companies that offer the lowest price do so by offering minimal touchpoints with their clients, and often minimal experience among their staff. Their goal is quantity, not quality. Similarly, companies that offer flat-rate pricing are not considering the unique aspects that accompany most 1031 Exchanges. 1031 Exchanges are not one size fits all and therefore a flat-rate pricing model doesn’t work.

    If you are looking to start a 1031 Exchange, we encourage you to reach out to various QIs and then evaluate their overall service offerings. Ask yourself the following questions of each QI: Were they easy to get ahold of via phone, live chat, email? Did they offer 1031 Exchange information and answers without charge? Do they have sufficient expertise and servicing team members?
    At Accruit, we pride ourselves on providing the world class customer service with a consistent Net Promoter Score of over 80; we have received over 200 5-star Google reviews from our valued clients; and perhaps most telling, over 93% of our clients are repeat customers or direct referrals from other companies within the real estate industry. Additionally, Accruit has five on-staff attorneys that are 1031 exchange subject matter experts boosting over 100 years collective experience.
    If you have any questions or would like more information on our 1031 Exchange services, please reach out to us today!

  • Find the Right Qualified Intermediary to Facilitate Your 1031 Exchange

    Find the Right Qualified Intermediary to Facilitate Your 1031 Exchange

    As with most service industries, not all Qualified Intermediaries (QIs) are created equal, nor do all QIs service their clients with the same standards and expectations in place. Below is a list of criteria you should evaluate prior to selecting a Qualified Intermediary to facilitate your 1031 exchange.

    Bigger Isn’t Always Better
    It is easy to assume that the largest company might be the best option, but that is seldom the case. We estimate that roughly 30% of the Live Chats we received through our website are from individuals and tax advisors that have a 1031 exchange open with a different QI but are unable to get in touch with them to answer their time sensitive questions in relation to their 1031 exchange, and so they reach out to us.
     
    Easy Accessibility
    Today’s consumer wants accessibility at their fingertips, and with today’s technology why shouldn’t they get it? When evaluating QI options, pay special attention to how easily you will be able to contact them in the future.
     

    Do they have a (800) number? Does a real person answer the call without you having to push several buttons to navigate an automated system? Will you have the ability to speak with an attorney, Certified Exchange Specialist®, or other subject matter expert regarding thorny situations?
     
    Do they have a live chat on their website, with a real specialist on the other end available to quickly answer your questions?
     

    QI Roster
    A QI is only as good as its employees. When researching your QI options, look into the breakdown of their internal team.
     

    Do they have on-staff attorneys specializing in 1031 Exchanges? Not all 1031 exchanges are cut and dry; some have complex aspects and nuances that require a specialized 1031 exchange attorney to ensure validity regarding IRC 1031. If the QI doesn’t have on-staff attorneys, you can expect delays and sometimes increased fees to bring in outside council.
     
    What is their largest department? If it is not the Service department, then you might infer service isn’t their priority. A QI set-up with an adequate service and processing team will be set-up for successfully processing 1031 exchanges.
     

    You Get What You Pay For
    As with most things, when it comes to a 1031 exchange, you get what you pay for. Pricing is often reflective of the level of personal attention you will receive throughout the process. Companies that offer the lowest price do so by offering minimal touchpoints with their clients, and often minimal experience among their staff. Their goal is quantity, not quality. Similarly, companies that offer flat-rate pricing are not considering the unique aspects that accompany most 1031 Exchanges. 1031 Exchanges are not one size fits all and therefore a flat-rate pricing model doesn’t work.

    If you are looking to start a 1031 Exchange, we encourage you to reach out to various QIs and then evaluate their overall service offerings. Ask yourself the following questions of each QI: Were they easy to get ahold of via phone, live chat, email? Did they offer 1031 Exchange information and answers without charge? Do they have sufficient expertise and servicing team members?
    At Accruit, we pride ourselves on providing the world class customer service with a consistent Net Promoter Score of over 80; we have received over 200 5-star Google reviews from our valued clients; and perhaps most telling, over 93% of our clients are repeat customers or direct referrals from other companies within the real estate industry. Additionally, Accruit has five on-staff attorneys that are 1031 exchange subject matter experts boosting over 100 years collective experience.
    If you have any questions or would like more information on our 1031 Exchange services, please reach out to us today!

  • 1031 Exchange & State Tax Withholding Requirements

    In certain states there is a mandatory tax withholding for nonresident individuals or businesses on the sale of real property. In performing a 1031 exchange you may be provided an exemption if executed properly. In the following section you will find a brief synopsis of the state withholding requirements. It is always important to consult your tax advisor before moving forward with a 1031 exchange. Failing to consult the correct professional advisors early could result in unnecessary taxes.
    ALABAMA

    Withholding: 3% of the sales price for individuals; 4% of the sales price for business entities.
    Exemption: Submit form NR-AF3 (“Seller’s Certificate of Exemption”)
    Further Information

    COLORADO

    Withholding: 2% of the sales price if the property is over $100,000.
    Exemption: In a 1031 exchange, the non-Colorado resident may sign an “Affirmation of No Reasonably Estimated Tax to be Due” per Colorado Department of Revenue Form DR1083.
    Further Information

    HAWAII

    Withholding: 5% of the sales price under the Hawaii Real Property Tax Act.
    Exemption: Completion of Form N-289 stating the seller is performing a 1031 exchange.
    Further Information

    MARYLAND

    Withholding: 7.5% by nonresident individual and 8.25% by nonresident entity.
    Exemption: Submit Form MW506AE at least 21 days prior to closing to the Maryland Comptroller’s Office if there is no boot. The state of Maryland also requires a letter from the qualified intermediary stating the amount of boot.
    Further Information

    NEW JERSEY

    Withholding: The buyer must file Form C-9000 with the Division of Taxation at least 10 days before closing. Within 10 days, the Division will forward a notice of the amount to be held in escrow at the closing including existing tax debts, delinquencies, assessments and tax on gain from the sale of property.
    Exemption: The seller may file an Asset Transfer Tax Declaration form to assist the Division in calculating the estimated tax on the gain. The Division has the discretion to adjust the escrow amount held. Payment of the taxes is made from the escrow account.
    Further Information

    NORTH CAROLINA

    Withholding: 4% of the sales price. The buyer must file a return with the Secretary of the State of North Carolina within 15 days of the sale closing.
    Further Information: NC Tax Code, Section 105-163

    OREGON

    Withholding: The lesser of 4% of the consideration or 8% of the gain or proceeds for individuals and C Corporations.
    Exemption: Submit Form WC exemption form.
    Further Information

    SOUTH CAROLINA

    Withholding: 7% for individuals and 5% for corporations.
    Exemption: Completion of Form I-295.
    Further Information

    WEST VIRGINIA

    Withholding: 2.5% of the sale proceeds or estimated capital gain.
    Exemption: File Form WV.NRAE with the State Tax Department no later than 21 days before closing.
    Further Information: West Virginia Code 11-21-71b

     
    Information presented in this article should not be perceived as tax or legal advice. Please consult your attorney and tax advisor before proceeding with a 1031 exchange.
     
    Updated 7/15/2022

  • 1031 Exchange & State Tax Withholding Requirements

    In certain states there is a mandatory tax withholding for nonresident individuals or businesses on the sale of real property. In performing a 1031 exchange you may be provided an exemption if executed properly. In the following section you will find a brief synopsis of the state withholding requirements. It is always important to consult your tax advisor before moving forward with a 1031 exchange. Failing to consult the correct professional advisors early could result in unnecessary taxes.
    ALABAMA

    Withholding: 3% of the sales price for individuals; 4% of the sales price for business entities.
    Exemption: Submit form NR-AF3 (“Seller’s Certificate of Exemption”)
    Further Information

    COLORADO

    Withholding: 2% of the sales price if the property is over $100,000.
    Exemption: In a 1031 exchange, the non-Colorado resident may sign an “Affirmation of No Reasonably Estimated Tax to be Due” per Colorado Department of Revenue Form DR1083.
    Further Information

    HAWAII

    Withholding: 5% of the sales price under the Hawaii Real Property Tax Act.
    Exemption: Completion of Form N-289 stating the seller is performing a 1031 exchange.
    Further Information

    MARYLAND

    Withholding: 7.5% by nonresident individual and 8.25% by nonresident entity.
    Exemption: Submit Form MW506AE at least 21 days prior to closing to the Maryland Comptroller’s Office if there is no boot. The state of Maryland also requires a letter from the qualified intermediary stating the amount of boot.
    Further Information

    NEW JERSEY

    Withholding: The buyer must file Form C-9000 with the Division of Taxation at least 10 days before closing. Within 10 days, the Division will forward a notice of the amount to be held in escrow at the closing including existing tax debts, delinquencies, assessments and tax on gain from the sale of property.
    Exemption: The seller may file an Asset Transfer Tax Declaration form to assist the Division in calculating the estimated tax on the gain. The Division has the discretion to adjust the escrow amount held. Payment of the taxes is made from the escrow account.
    Further Information

    NORTH CAROLINA

    Withholding: 4% of the sales price. The buyer must file a return with the Secretary of the State of North Carolina within 15 days of the sale closing.
    Further Information: NC Tax Code, Section 105-163

    OREGON

    Withholding: The lesser of 4% of the consideration or 8% of the gain or proceeds for individuals and C Corporations.
    Exemption: Submit Form WC exemption form.
    Further Information

    SOUTH CAROLINA

    Withholding: 7% for individuals and 5% for corporations.
    Exemption: Completion of Form I-295.
    Further Information

    WEST VIRGINIA

    Withholding: 2.5% of the sale proceeds or estimated capital gain.
    Exemption: File Form WV.NRAE with the State Tax Department no later than 21 days before closing.
    Further Information: West Virginia Code 11-21-71b

     
    Information presented in this article should not be perceived as tax or legal advice. Please consult your attorney and tax advisor before proceeding with a 1031 exchange.
     
    Updated 7/15/2022

  • 1031 Exchange & State Tax Withholding Requirements

    In certain states there is a mandatory tax withholding for nonresident individuals or businesses on the sale of real property. In performing a 1031 exchange you may be provided an exemption if executed properly. In the following section you will find a brief synopsis of the state withholding requirements. It is always important to consult your tax advisor before moving forward with a 1031 exchange. Failing to consult the correct professional advisors early could result in unnecessary taxes.
    ALABAMA

    Withholding: 3% of the sales price for individuals; 4% of the sales price for business entities.
    Exemption: Submit form NR-AF3 (“Seller’s Certificate of Exemption”)
    Further Information

    COLORADO

    Withholding: 2% of the sales price if the property is over $100,000.
    Exemption: In a 1031 exchange, the non-Colorado resident may sign an “Affirmation of No Reasonably Estimated Tax to be Due” per Colorado Department of Revenue Form DR1083.
    Further Information

    HAWAII

    Withholding: 5% of the sales price under the Hawaii Real Property Tax Act.
    Exemption: Completion of Form N-289 stating the seller is performing a 1031 exchange.
    Further Information

    MARYLAND

    Withholding: 7.5% by nonresident individual and 8.25% by nonresident entity.
    Exemption: Submit Form MW506AE at least 21 days prior to closing to the Maryland Comptroller’s Office if there is no boot. The state of Maryland also requires a letter from the qualified intermediary stating the amount of boot.
    Further Information

    NEW JERSEY

    Withholding: The buyer must file Form C-9000 with the Division of Taxation at least 10 days before closing. Within 10 days, the Division will forward a notice of the amount to be held in escrow at the closing including existing tax debts, delinquencies, assessments and tax on gain from the sale of property.
    Exemption: The seller may file an Asset Transfer Tax Declaration form to assist the Division in calculating the estimated tax on the gain. The Division has the discretion to adjust the escrow amount held. Payment of the taxes is made from the escrow account.
    Further Information

    NORTH CAROLINA

    Withholding: 4% of the sales price. The buyer must file a return with the Secretary of the State of North Carolina within 15 days of the sale closing.
    Further Information: NC Tax Code, Section 105-163

    OREGON

    Withholding: The lesser of 4% of the consideration or 8% of the gain or proceeds for individuals and C Corporations.
    Exemption: Submit Form WC exemption form.
    Further Information

    SOUTH CAROLINA

    Withholding: 7% for individuals and 5% for corporations.
    Exemption: Completion of Form I-295.
    Further Information

    WEST VIRGINIA

    Withholding: 2.5% of the sale proceeds or estimated capital gain.
    Exemption: File Form WV.NRAE with the State Tax Department no later than 21 days before closing.
    Further Information: West Virginia Code 11-21-71b

     
    Information presented in this article should not be perceived as tax or legal advice. Please consult your attorney and tax advisor before proceeding with a 1031 exchange.
     
    Updated 7/15/2022

  • 1031 Exchange Timeline Requirements and Holidays

    1031 Exchange Timeline Requirements and Holidays

    For a majority of IRS Tax dates, should a deadline fall on a weekend or holiday, you have until the following business day to complete that task. For example, if Tax Day, April 15, falls on a Saturday then you have until Monday, April 17 to file your individual tax return. The same is NOT true for your 1031 Exchange timeline requirements. 1031 Exchanges are unique in that federal holidays, and weekends, count as any other day in your 45-day Identification and 180-day exchange periods.
    We are often asked, “If one of my 1031 Exchange deadlines fall on a non-business day or afederal holiday, does that mean I have until the following business day to complete the task?”
    The answer isn’t what you might assume. The short answer is No. If one of your exchange timeline requirements, such as your 45-day Identification or your 180-day exchange period falls on a federal holiday, or even just a weekend, you do NOT have until the following business day. In order for your 1031 exchange to remain valid you need to complete the task on or prior to the date of business closure, whether that be due to a federal holiday or weekend.
    Below is a breakdown of how you should treat your 1031 Exchange timelines should they fall on federal holidays or weekends:
    45-day Identification Period
    Your 45-day Identification Period is relatively unaffected by federal holidays and weekends. Below are excerpts from the Regulations:
    (b) IDENTIFICATION & RECEIPT REQUIREMENTS
    (1) IN GENERAL. In the case of a deferred exchange, any replacement property received by the taxpayer will be treated as property which is not of a like kind to the relinquished property if –
    (i) The replacement property is not “identified” before the end of the “identification period,” or
    (ii) The identified replacement property is not received before the end of the “exchange period.”
    (2) IDENTIFICATION PERIOD AND EXCHANGE PERIOD.
    (i) The identification period begins on the date the taxpayer transfers the relinquished property and ends at midnight on the 45th day thereafter.
    (ii) The exchange period begins on the date the taxpayer transfers the relinquished property and ends at midnight on the earlier of the 180th day thereafter or the due date (including extensions) for the taxpayer’s return of the tax imposed by chapter 1 of subtitle A of the Code for the taxable year in which the transfer of the relinquished property occurs.
    ****
    (2) MANNER OF IDENTIFYING REPLACEMENT PROPERTY. Replacement property is identified only if it is designated as replacement property in a written document signed by the taxpayer and hand delivered, mailed, telecopied, or otherwise sent before the end of the identification period to either –
    (i) The person obligated to transfer the replacement property to the taxpayer (regardless of whether that person is a disqualified person as defined in paragraph (k) of this section); or
    (ii) Any other person involved in the exchange other than the taxpayer or a disqualified person (as defined in paragraph (k) of this section).
    (iii) Examples of persons involved in the exchange include any of the parties to the exchange, an intermediary, an escrow agent, and a title company. An identification of replacement property made in a written agreement for the exchange of properties signed by all parties thereto before the end of the identification period will be treated as satisfying the requirements of this paragraph (c)(2).
    (3) DESCRIPTION OF REPLACEMENT PROPERTY. Based on the above regulations, even if day 45 falls on a weekend or federal holiday, when most businesses in the industry are closed, you could technically still submit the identification on day 45 via email, fax, or mail so long as all the above requirements are fulfilled. That being said, we strongly encourage you to complete your identification in advance of day 45, so you don’t risk the chance of missing this critical deadline.
     
    180-day Exchange Period
    Alternatively, your 180-day Exchange deadline can be affected by federal holidays or weekends. If day 180 falls on a federal holiday, or weekend, you will need to complete the purchase of your replacement property PRIOR to day 180 because the parties responsible for facilitating the purchase closing will likely be closed and unable to complete the close of the Replacement Property purchase on day 180.
    2023 Federal Holidays
    Below are the recognized Federal Holiday by the IRS for the upcoming year, 2023:

    Date
    Holiday

    Monday, January 02 *
     New Year’s Day

    Monday, January 16
     Birthday of Martin Luther King, Jr.

    Monday, February 20 **
     Washington’s Birthday

    Monday, May 29
     Memorial Day

    Monday June 19
     Juneteenth National Independence Day

    Tuesday, July 04
     Independence Day

    Monday, September 04
     Labor Day

    Monday, October 09
     Columbus Day

    Friday, November 10 *
     Veterans Day

    Thursday, November 23
     Thanksgiving Day

    Monday, December 25
     Christmas Day

    *If a holiday falls on a Saturday, for most Federal employees, the preceding Friday will be treated as a holiday for pay and leave purposes. (See 5 U.S.C. 6103(b).) If a holiday falls on a Sunday, for most Federal employees, the following Monday will be treated as a holiday for pay and leave purposes. (See Section 3(a) of Executive Order 11582, February 11, 1971.) See also our Federal Holidays – “In Lieu Of” Determination Fact Sheet at https://www.opm.gov/policy-data-oversight/pay-leave/work-schedules/fact…;
    **This holiday is designated as “Washington’s Birthday” in section 6103(a) of title 5 of the United States Code, which is the law that specifies holidays for Federal employees. Though other institutions such as state and local governments and private businesses may use other names, it is our policy to always refer to holidays by the names designated in the law. Your Qualified Intermediary (QI) will work closely with you to ensure you are aware of your upcoming 1031 Exchange timeline requirements, but don’t assume your 1031 Exchange recognizes government office closures.
     
    Your Qualified Intermediary (QI) will work closely with you to ensure you are aware of your upcoming 1031 Exchange timeline requirements, but don’t assume your 1031 Exchange recognizes government office closures.

  • 1031 Exchange Timeline Requirements and Holidays

    1031 Exchange Timeline Requirements and Holidays

    For a majority of IRS Tax dates, should a deadline fall on a weekend or holiday, you have until the following business day to complete that task. For example, if Tax Day, April 15, falls on a Saturday then you have until Monday, April 17 to file your individual tax return. The same is NOT true for your 1031 Exchange timeline requirements. 1031 Exchanges are unique in that federal holidays, and weekends, count as any other day in your 45-day Identification and 180-day exchange periods.
    We are often asked, “If one of my 1031 Exchange deadlines fall on a non-business day or afederal holiday, does that mean I have until the following business day to complete the task?”
    The answer isn’t what you might assume. The short answer is No. If one of your exchange timeline requirements, such as your 45-day Identification or your 180-day exchange period falls on a federal holiday, or even just a weekend, you do NOT have until the following business day. In order for your 1031 exchange to remain valid you need to complete the task on or prior to the date of business closure, whether that be due to a federal holiday or weekend.
    Below is a breakdown of how you should treat your 1031 Exchange timelines should they fall on federal holidays or weekends:
    45-day Identification Period
    Your 45-day Identification Period is relatively unaffected by federal holidays and weekends. Below are excerpts from the Regulations:
    (b) IDENTIFICATION & RECEIPT REQUIREMENTS
    (1) IN GENERAL. In the case of a deferred exchange, any replacement property received by the taxpayer will be treated as property which is not of a like kind to the relinquished property if –
    (i) The replacement property is not “identified” before the end of the “identification period,” or
    (ii) The identified replacement property is not received before the end of the “exchange period.”
    (2) IDENTIFICATION PERIOD AND EXCHANGE PERIOD.
    (i) The identification period begins on the date the taxpayer transfers the relinquished property and ends at midnight on the 45th day thereafter.
    (ii) The exchange period begins on the date the taxpayer transfers the relinquished property and ends at midnight on the earlier of the 180th day thereafter or the due date (including extensions) for the taxpayer’s return of the tax imposed by chapter 1 of subtitle A of the Code for the taxable year in which the transfer of the relinquished property occurs.
    ****
    (2) MANNER OF IDENTIFYING REPLACEMENT PROPERTY. Replacement property is identified only if it is designated as replacement property in a written document signed by the taxpayer and hand delivered, mailed, telecopied, or otherwise sent before the end of the identification period to either –
    (i) The person obligated to transfer the replacement property to the taxpayer (regardless of whether that person is a disqualified person as defined in paragraph (k) of this section); or
    (ii) Any other person involved in the exchange other than the taxpayer or a disqualified person (as defined in paragraph (k) of this section).
    (iii) Examples of persons involved in the exchange include any of the parties to the exchange, an intermediary, an escrow agent, and a title company. An identification of replacement property made in a written agreement for the exchange of properties signed by all parties thereto before the end of the identification period will be treated as satisfying the requirements of this paragraph (c)(2).
    (3) DESCRIPTION OF REPLACEMENT PROPERTY. Based on the above regulations, even if day 45 falls on a weekend or federal holiday, when most businesses in the industry are closed, you could technically still submit the identification on day 45 via email, fax, or mail so long as all the above requirements are fulfilled. That being said, we strongly encourage you to complete your identification in advance of day 45, so you don’t risk the chance of missing this critical deadline.
     
    180-day Exchange Period
    Alternatively, your 180-day Exchange deadline can be affected by federal holidays or weekends. If day 180 falls on a federal holiday, or weekend, you will need to complete the purchase of your replacement property PRIOR to day 180 because the parties responsible for facilitating the purchase closing will likely be closed and unable to complete the close of the Replacement Property purchase on day 180.
    2023 Federal Holidays
    Below are the recognized Federal Holiday by the IRS for the upcoming year, 2023:

    Date
    Holiday

    Monday, January 02 *
     New Year’s Day

    Monday, January 16
     Birthday of Martin Luther King, Jr.

    Monday, February 20 **
     Washington’s Birthday

    Monday, May 29
     Memorial Day

    Monday June 19
     Juneteenth National Independence Day

    Tuesday, July 04
     Independence Day

    Monday, September 04
     Labor Day

    Monday, October 09
     Columbus Day

    Friday, November 10 *
     Veterans Day

    Thursday, November 23
     Thanksgiving Day

    Monday, December 25
     Christmas Day

    *If a holiday falls on a Saturday, for most Federal employees, the preceding Friday will be treated as a holiday for pay and leave purposes. (See 5 U.S.C. 6103(b).) If a holiday falls on a Sunday, for most Federal employees, the following Monday will be treated as a holiday for pay and leave purposes. (See Section 3(a) of Executive Order 11582, February 11, 1971.) See also our Federal Holidays – “In Lieu Of” Determination Fact Sheet at https://www.opm.gov/policy-data-oversight/pay-leave/work-schedules/fact…;
    **This holiday is designated as “Washington’s Birthday” in section 6103(a) of title 5 of the United States Code, which is the law that specifies holidays for Federal employees. Though other institutions such as state and local governments and private businesses may use other names, it is our policy to always refer to holidays by the names designated in the law. Your Qualified Intermediary (QI) will work closely with you to ensure you are aware of your upcoming 1031 Exchange timeline requirements, but don’t assume your 1031 Exchange recognizes government office closures.
     
    Your Qualified Intermediary (QI) will work closely with you to ensure you are aware of your upcoming 1031 Exchange timeline requirements, but don’t assume your 1031 Exchange recognizes government office closures.

  • 1031 Exchange Timeline Requirements and Holidays

    1031 Exchange Timeline Requirements and Holidays

    For a majority of IRS Tax dates, should a deadline fall on a weekend or holiday, you have until the following business day to complete that task. For example, if Tax Day, April 15, falls on a Saturday then you have until Monday, April 17 to file your individual tax return. The same is NOT true for your 1031 Exchange timeline requirements. 1031 Exchanges are unique in that federal holidays, and weekends, count as any other day in your 45-day Identification and 180-day exchange periods.
    We are often asked, “If one of my 1031 Exchange deadlines fall on a non-business day or afederal holiday, does that mean I have until the following business day to complete the task?”
    The answer isn’t what you might assume. The short answer is No. If one of your exchange timeline requirements, such as your 45-day Identification or your 180-day exchange period falls on a federal holiday, or even just a weekend, you do NOT have until the following business day. In order for your 1031 exchange to remain valid you need to complete the task on or prior to the date of business closure, whether that be due to a federal holiday or weekend.
    Below is a breakdown of how you should treat your 1031 Exchange timelines should they fall on federal holidays or weekends:
    45-day Identification Period
    Your 45-day Identification Period is relatively unaffected by federal holidays and weekends. Below are excerpts from the Regulations:
    (b) IDENTIFICATION & RECEIPT REQUIREMENTS
    (1) IN GENERAL. In the case of a deferred exchange, any replacement property received by the taxpayer will be treated as property which is not of a like kind to the relinquished property if –
    (i) The replacement property is not “identified” before the end of the “identification period,” or
    (ii) The identified replacement property is not received before the end of the “exchange period.”
    (2) IDENTIFICATION PERIOD AND EXCHANGE PERIOD.
    (i) The identification period begins on the date the taxpayer transfers the relinquished property and ends at midnight on the 45th day thereafter.
    (ii) The exchange period begins on the date the taxpayer transfers the relinquished property and ends at midnight on the earlier of the 180th day thereafter or the due date (including extensions) for the taxpayer’s return of the tax imposed by chapter 1 of subtitle A of the Code for the taxable year in which the transfer of the relinquished property occurs.
    ****
    (2) MANNER OF IDENTIFYING REPLACEMENT PROPERTY. Replacement property is identified only if it is designated as replacement property in a written document signed by the taxpayer and hand delivered, mailed, telecopied, or otherwise sent before the end of the identification period to either –
    (i) The person obligated to transfer the replacement property to the taxpayer (regardless of whether that person is a disqualified person as defined in paragraph (k) of this section); or
    (ii) Any other person involved in the exchange other than the taxpayer or a disqualified person (as defined in paragraph (k) of this section).
    (iii) Examples of persons involved in the exchange include any of the parties to the exchange, an intermediary, an escrow agent, and a title company. An identification of replacement property made in a written agreement for the exchange of properties signed by all parties thereto before the end of the identification period will be treated as satisfying the requirements of this paragraph (c)(2).
    (3) DESCRIPTION OF REPLACEMENT PROPERTY. Based on the above regulations, even if day 45 falls on a weekend or federal holiday, when most businesses in the industry are closed, you could technically still submit the identification on day 45 via email, fax, or mail so long as all the above requirements are fulfilled. That being said, we strongly encourage you to complete your identification in advance of day 45, so you don’t risk the chance of missing this critical deadline.
     
    180-day Exchange Period
    Alternatively, your 180-day Exchange deadline can be affected by federal holidays or weekends. If day 180 falls on a federal holiday, or weekend, you will need to complete the purchase of your replacement property PRIOR to day 180 because the parties responsible for facilitating the purchase closing will likely be closed and unable to complete the close of the Replacement Property purchase on day 180.
    2023 Federal Holidays
    Below are the recognized Federal Holiday by the IRS for the upcoming year, 2023:

    Date
    Holiday

    Monday, January 02 *
     New Year’s Day

    Monday, January 16
     Birthday of Martin Luther King, Jr.

    Monday, February 20 **
     Washington’s Birthday

    Monday, May 29
     Memorial Day

    Monday June 19
     Juneteenth National Independence Day

    Tuesday, July 04
     Independence Day

    Monday, September 04
     Labor Day

    Monday, October 09
     Columbus Day

    Friday, November 10 *
     Veterans Day

    Thursday, November 23
     Thanksgiving Day

    Monday, December 25
     Christmas Day

    *If a holiday falls on a Saturday, for most Federal employees, the preceding Friday will be treated as a holiday for pay and leave purposes. (See 5 U.S.C. 6103(b).) If a holiday falls on a Sunday, for most Federal employees, the following Monday will be treated as a holiday for pay and leave purposes. (See Section 3(a) of Executive Order 11582, February 11, 1971.) See also our Federal Holidays – “In Lieu Of” Determination Fact Sheet at https://www.opm.gov/policy-data-oversight/pay-leave/work-schedules/fact…;
    **This holiday is designated as “Washington’s Birthday” in section 6103(a) of title 5 of the United States Code, which is the law that specifies holidays for Federal employees. Though other institutions such as state and local governments and private businesses may use other names, it is our policy to always refer to holidays by the names designated in the law. Your Qualified Intermediary (QI) will work closely with you to ensure you are aware of your upcoming 1031 Exchange timeline requirements, but don’t assume your 1031 Exchange recognizes government office closures.
     
    Your Qualified Intermediary (QI) will work closely with you to ensure you are aware of your upcoming 1031 Exchange timeline requirements, but don’t assume your 1031 Exchange recognizes government office closures.

  • Seller Financing in a 1031 Exchange Infographic

    Seller Financing in a 1031 Exchange Infographic

    How to do Seller Financing in a 1031 Exchange? 
    Our infographic below covers the process of Seller Financing in a 1031 Exchange at high level.
     

     
    For more information on Seller Financing in relation to a 1031 Exchange, reach out to our team of experts!