1031 exchange and earnest money

Dear 1031x.com We have some earnest money coming in for a land sale. Do we need  to identify a like-exchange for that, or can it sit in an escrow account  until the property closes?

Dear B:  The earnest money is not really proceeds from the sale of real estate yet.  Only such proceeds need be put in a 1031 escrow.  In short the earnest money can really be held any way until it becomes proceeds from a sale.  Sincerely, 

Steve Hickox
Attorney / President

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