Mistakes to Avoid With 1031 Exchange for Your Own Good A 1031 Exchange is an excellent vehicle for people to surrender their capital gain on land exchange, such as peсulation or breeding lands. The IR deemed the guidelines very straightforward and easy to obey, but some people prefer to threaten the acceptance of their exchange by attempting to adapt them to their own needs. Here are a few mistakes that you must avoid when going for the 1031 exchange and consider taking help from 1031 exchange experts in Salt Lake City.
Missing the deadline You have 180 days to complete a delayed 1031 exchange from beginning to end. That implies you have precisely six months (180 days) from the moment you sell the first estate (referred to as the relinquished property) before you close on the replacement property.
Some people just assume that the 180-day cycle starts when you are nominated. This is incorrect. It starts, however, when you sell your home. There aren't any workarounds or extensions. The new property must be closed within 180 days, or the 1031 exchange tax benefit will be lost.
Cash transfer When it comes to your 1031 trade, the sheltered harbor rules are clear: you don't have leverage over the cash from the selling of your house. This ensures that the proceeds of your agreement must be deposited in a trust account and be fully under the control of your trained mediator. Any effort to hold the cash for yourself, keep it bonded with the title entity, or keep it bonded with any other means where you can have a clear influence of your reality places you in “useful” reception of your return. When this occurs, there will be no 1031 Exchange.