1031 exchange:
Exchanges Require Specialized Knowledge
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A realtor called us with a technical exchange question. He was in a hurry, as the relinquished property was closing that very day. The question was: Can an exchanger carry back a note and deed of trust and also perform a 1031 exchange on the same relinquished property?
Despite answering the realtor's question, we did not act as Qualified Intermediary for that exchange. As it turned out, a title company was handling the exchange, but being unable to answer the question, they referred the realtor to us for technical advice.
Answer: We discourage exchangers from combining owner carry financing with 1031 exchanges. This combination complicates exchanges, however, the Internal Revenue Code specifically allows both an exchange and installment note treatment in the same transaction.
The moral of the story is: "When seeking specialized knowledge, ask a specialist."
