1031 Exchange Agreement Form With Us In Washington

Category:

Real Estate - Taxes

State:

Multi-State

Control #:

US-00333

Format:

Instant download

Description

This form states that the owner of certain property desires to exchange the property for other real property of like kind and to qualify the exchange as a nonrecognition transaction. The agreement also discusses assignment of contract rights to transfer relinquished property, resolution of dispute, indemnification, and liability of exchangor.

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FAQ

Lack of Liquidity- Exchanging properties continually can tie up funds in real estate, making it hard for an investor to access liquid capital if required. While real estate can be a profitable investment, it's not as liquid as some other assets.

A 1031 exchange does not obviate the need for a realtor. Quite to the contrary, in most cases an Exchanger has an even greater need for a realtor due to the time constraints placed on Exchangers.

Section 1031(f) provides that if a Taxpayer exchanges with a related party then the party who acquired the property in the exchange must hold it for 2 years or the exchange will be disallowed.

While an investor can choose which property to sell (exchange) and identify replacement properties, the investor/taxpayer may not control or have access to the funds in between those two events. For that reason, the use of a qualified intermediary is necessary.

How to Do a 1031 Exchange Choose a qualified intermediary to coordinate the exchange. Sell your current real estate property. You have 45 days to identify potential replacement properties. You have 180 days to close on a replacement property. File IRS Form 8824.

A Qualified Intermediary, or QI, is an independent third party to the transaction whose function is to prepare the documents necessary to create the exchange, as well as to act as the independent escrow agent for the exchange funds.

What Is a Qualified Intermediary? Qualified Intermediary (QI) is someone a property seller selects to oversee the 1031 exchange process and its funds. They hold the funds from the previous property and use them to acquire the new replacement property to ensure compliance with IRS regulations.

Your 1031 exchange must be reported by completing Form 8824 and filing it along with your federal income tax return. If you completed more than one exchange, a different form must be completed for each exchange. For line-by-line instructions on how to complete form, download the instructions here.

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Washington 1031 Exchange rules allow investors to defer capital gains on sale of qualified property if exchanged for like-kind property. Providing Washington investors with 1031 Exchange replacement properties guidance and properties that qualify for a 1031 Exchange.You must report the exchange to the IRS on Form 8824. With your final statement, we will send our workbook explaining how to fill out your Form 8824 properly. Step 1: While contemplating the sale of an investment property, contact 1031 Pros. Washington state law, rcw 19.1310. Drawbacks of a Section 1031 Exchange include a reduced basis for depreciation in the replacement property. 1031 Exchange Guide outlines the basics of Section 1031 likekind exchanges so you can figure out if an exchange is right for you.

1031 Exchange Agreement Form With Us In Washington

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What is the downside of a 1031 exchange?

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