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Redfin Real Estate Forums :
Bay Area :
Re: 1031 exchange
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1031 exchange
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lol2g
Contributor
Posts: 10
Registered: 11-24-2008
Message 1 of 5
Viewed 1,458 times
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Hi, A townhouse in an area that we are looking to buy came on the market with a reasonable price. The listing states that "buyer is to cooperate with a 1031 exchange at no expense to the buyer". I googled 1031 exchange and after reading about it, I'm still not sure how that effects the buyer. Can someone tell me in layman's terms? Thanks.
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04-02-2009 11:01 PM
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Re: 1031 exchange
[ Edited ]
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Jim
Redfin Lead Agent
Posts: 24
Registered: 07-31-2007
Message 3 of 5
Viewed 1,364 times
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The IRS requires a buyer to recognize that they are participating in a 1031 exchange on behalf of the seller. Beyond that, it is a normal transaction. You do not need to wait up to 6 months to move into the property. A 1031 exchange essentially allows a seller to 'trade' investment properties and not be taxed the same as a normal sall, as they are transferring the money to a like-kind property. eA seller does have 45 days to identify the next property they want to purchase and 180 days to close on that property. However, their clock starts ticking once you close on the first sale. So the time frames have nothing to do with anything on the buyer's side. However, the seller is legally obligated to let you know that they are selling the property as a 1031 exchange. The rest is the same as a normal purchase. Jim Holt Redfin Agent Message Edited by Jim on 04-03-2009 01:33 PM
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04-03-2009 12:42 PM
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