The Statewide Title Newsletter and Legal Memorandum

The Statewide Title Newsletter and Legal Memorandum Printable Article - Statewide Title, Inc.

Found At:
Issue  244  Article  388
Published:  4/1/2018

Can I Get My Money Before the Exchange Ends?
Chris Burti, President Statewide Title Exchange Corporation

Part of the 1031 XChange Index - Originally Published 6/15/2007 at STEC

Once a QI enters into an exchange agreement with a taxpayer, there are certain fiduciary rules that pertain to taxpayer funds and property.

As a general rule in exchanges, the QI will disburse proceeds based on one of the following conditions:

The exchange agreement entered into between the QI and the taxpayer should list these situations as exceptions to the rule that the taxpayer does not have the right to receive, pledge, borrow, or benefit from the proceeds before the end of the exchange.

Practically speaking, these restrictions on disbursements apply to taxpayers in the following ways:

This limited control over funds and/or property during the exchange is a key distinction between a straight sale and purchase and reaping the tax benefits of a like kind exchange.

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