Discussion:1031 Exchange - Earnest Money for Replacement Property
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Discussion Forum Index --> Advanced Tax Questions --> 1031 Exchange - Earnest Money for Replacement Property
Discussion Forum Index --> Tax Questions --> 1031 Exchange - Earnest Money for Replacement Property
| 7 March 2008 | |
| I am trying to obtain information on how to pay earnest money for replacement property in a 1031 exchange. Can the earnest money be paid out of the excahnge funds prior to the assignment of the real estate contract? According to the safe harbors, a QI is considered as acquiring replacement property until it has entered into an agreement with the owner of the replacement property. Therefore, it appears to me that you can't make any payments until the assignment takes place?
Also, what would be the effect of the QI marking the funds or pledging them to be paid at a later date when the assignment has been completed? Thanks | |
RoyDaleOne (talk|edits) said: | 7 March 2008 |
| I lived in Greencastle when I was a kid. Born and raised in Putnam County. | |
RoyDaleOne (talk|edits) said: | 7 March 2008 |
| So DePaul in Shy Town and not the one in Greencastle, sorry about that.
1. You can pay earnest money from your own funds and get it back at closing. 2. If the QI has the funds then you should try to negotiate a minimal earnest money deposit or none at all with the buyer. The inspection period is going to short. | |
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