This Weeks TEE-Shot

Wed
20
Aug

Saving A Failed Exchange

We occasionally get a client who, for one reason or another, is unable to complete their exchange, usually because they cannot find suitable replacement property. If they don’t identify ANY replacement property, their exchange ends at midnight on the 45th day. We return their funds to them the next day and they pay tax on the sale. If they DO identify replacement property by the 45th day, their exchange continues until either: A) they purchase their new property, or B) their replacement period expires on the 180th day. If they don’t purchase, their exchange funds are then returned on the 181st day. Again, their sale is taxable because they did not complete the exchange.

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