Discussion:1031 exchange--180 day problem
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Discussion Forum Index --> Advanced Tax Questions --> 1031 exchange--180 day problem
Discussion Forum Index --> Tax Questions --> 1031 exchange--180 day problem
| 25 January 2008 | |
| On a 1031 exchange, one has 180 days to replace the old business property with the new business property. Here's the question. The old property consists of land and a building. The new business property is land, in which a building is currently being constructed. The exchange was for new land plus $500K for the old building and land.
What are the requirements for the $500K to be deferred in a 1031 exchange? The new building will cost approximately $1M to build. The 180 days expires next week. If the taxpayer pays $500 of the construction costs, can that be used against the $500K cash received? In other words, will the 1031 exchange requirements be satisfied...or does the building need to be complete? Any input is appreciated. | |
| 25 January 2008 | |
| I believe that the payment for work completed up to the 180th day (or day payment is made, if earlier) qualifies. Therefore I'd recommend a "progress report" that showed what was done and invoiced to that point - kind of like a builder gets a draw after completing so much. | |
| 25 January 2008 | |
| Revenue Procedure 2000-37 | |
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