Discussion:1031 QI Paid Interest on Proceeds

The paying of interest on the proceeds appears that the client had control of proceeds. I've done only a handfull of these. Fees have always been paid to the intermediary and no one was ever issued a 1099 int or earned interest on the proceeds.

Your thoughts.

my thought is that you may be wrong because you don't know that interest or a growth factor is allowed

why you don't know is anyone's guess

Don't chalk up the sarcasm to this time of year. Chalk it up to the fact that Kevin is correct.

Treasury Regulation 1.1031(k)-1(g)(5)INTEREST AND GROWTH FACTORS. In the case of a deferred exchange, the determination of whether the taxpayer is in actual of constructive receipt of money or other property before the taxpayer actually receives the like-kind replacement property will be made without regard to the fact that the taxpayer is or may be entitled to receive any interest or growth factor with respect to the deferred exchange.

Tom

Some days the boring aspect of private accounting looks good. It seems to always hit at this time of the year.

I did private accounting for 20+ years. I left because I got tired of the rat race and the backstabbing. I work for myself and now, I make a hell of lot less, a little more stress this time of year, but, I spend more time with my wife and daughter. As much as my wife tells me sometimes to go back, I won't.

It took coming here to re-sharpen my research skills. Kevin, Riley2, JR1, Death&Taxes, RoyDaleOne, DZCPA, Solomon, TheTinCook, CrowJD, Fsteincpa, Natalie, and too many others numerous to mention are willing to give you a hand.

A suggestion: Frame your question differently. Try: "I've researched this and cannot find it. Does the paying of interest from a qualified intermediary on a 1031 exchange taint the exchange itself?" When Kevin says no, take it as gospel. If Riley2 jumps in, he would have given you the citation, which I did. But I went a step further and gave you most of the paragraph. And Riley2 is another you can take at his word.

Indicate you've done something just like you did here. Kevin and everyone will be very helpful if you help us to know you've tried to do a little research.

Tom

Kevin, I apologize for my ineptness at expressing myself and at research. (These blasted bifocals always get me in trouble) I beg your forgiveness and pledge to do a better job in the future. Next time you have my permission,no please tell me to read the regs.

I am still struggling with on-line research. I prefer to have the book in hand, but there is only so much space for research material and these young ones always give me guff about using the books. I still have my old library which has some research books dating 1919 on.

Again thank you.

It's okay. We all make mistakes. I do all the time. I mention two in this thread right here:

Discussion:What's the Best thing that happened to you today?

Have a good laugh.

Tom

But I answer the questions as I see them being asked.

You asked why you were wrong, and the answer was obvious: because you did not know the correct answer; but as to WHY you didn't know that was truly beyond me. I do not read minds. I do not know which classes you have taken or which study materials and resources you have researched.

And if anyone dares ask for my thoughts, I'll give them. Sometimes I'll give them without being asked.

I did give you the correct answer, which is what is important. Searching on those key words may even have allowed you to find the cite, if Tom hadn't known it (or found it using the key words).

As a follow on question, can I include the interest in the adjusted profit from sale, if the interest goes directly from the transfer company to the seller of the replacement property? Or should this be reported as normal interest income. I am not an accountant, just one of those annoying people that does their own taxes.

Tom