Question: Are there any additional Requirements other than listed on the home page?

Answer:
1. The sales contract should provide that the sale will be treated as a like kind exchange.

2. There must be a formal exchange agreement which ties the sale of the first property to the purchase of the second property.

3. The proceeds received upon sale are held by a qualified intermediary until the next property or properties are purchased. These properties must be of like kind of the property sold, and either held for investment or used in the tax payer’s business.

4. The identity of the Seller of the property must be the same as the Purchaser of the replacement property.

Question: Who can be a qualified intermediary?

Answer:
First of all, your family members, your lawyer or your accountant cannot serve as the qualified intermediary. Generally, you should look for someone who has a great deal of expertise in this area such as Strategic Property Exchanges, LLC.

Question: What are the time limits?

Answer:
Suitable replacement property (ies) must be identified within 45 days after the date of the closing for the first sale and the replacement property (ies) must be purchased within 180 days after the date of the closing for the first sale.

Question: Can I purchase the replacement property before the first property sells?

Answer:
Yes, that is commonly referred to as a “reverse exchange."

Question: Can I receive cash left over after the purchase of the replacement property?

Answer:
Yes, this will not cause the Exchange to fail, however generally you will be taxed on the receipt of cash.

Question: How can I take cash out of an Exchange and not be taxed?

Answer:
There is considerable leeway on this, but we must carefully plan this out with you or with your advisors.

Question: A common problem involves the sale of property by partnerships – where some partners want cash and others seek to reinvest. How can this be done?

Answer:
The starting point is understanding the needs and wants of the partners. Then provide a range of options to the partners. There are a number of ways this can be done tax free or tax deferred.

Question: How many properties may I identify as replacements?

Answer:
Just keep the following two rules in mind:

3-property rule: You may identify any three properties as possible replacements for your relinquished property. More than 95% of exchanges use the 3-property rule.

200% rule: You may identify any amount of properties as possible replacements for your relinquished property as long as the aggregate value of those properties does not exceed 200% of the value of your relinquished property.