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LawTalk, Attorney
Category: Real Estate Law
Satisfied Customers: 37855
Experience:  I have 30 years legal experience. Additionally, in CA I held a Real Estate Broker's license.
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Ok somewhat unrelated.. but related. In a 1031 exchange, I

Customer Question

Ok somewhat unrelated.. but related. In a 1031 exchange, I understand you have 90 days to disclose and 90 days to purchase a new property. In the case that you have to sell several properties (for example, a couple of duplexes to buy another set of duplexes) what would be the best way to do that, knowing that you may not sell both at the same time? What happens if, for example, a purchase contract is in place and the remainder of all the properties aren't  in place... where would those funds go, and would they be taxed?

Submitted: 2 years ago.
Category: Real Estate Law
Expert:  LawTalk replied 2 years ago.

Good afternoon,

I'm Doug, and I'm sorry to hear of the confusion. My goal is to provide you with excellent service today.

In this situation you would want the sale of each duplex to be contingent on the sale of the others and the property you want to acquire contingent on the sale of the duplexes, close with enough time to avoid violating the time constraints of the exchange. There is no way you can sell one property and not do the exchange within the time limits and avoid the tax on the gain.

The qualified intermediary must still be used but if the transactions are not completed in time, you are taxed on the gain.

I understand that you may be disappointed by the Answer you received, as it was not particularly favorable to your situation. Had I been able to provide an Answer which might have given you a successful legal outcome, it would have been my pleasure to do so.

If you have additional questions, you may of course reply back to me and I will be happy to continue to assist you further until your questions have been answered to your satisfaction.

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Thank you,