CONTACT Rodeo 1031 EXCHANGE: The Qualified Intermediary must be involved prior to the sale of the relinquished property. Qualified Intermediaries will be holding your funds therefore it is important that the QI has the proper Fidelity Bond, and the exchanger should insist that the funds are held in a segregated escrow account. At Rodeo 1031 we prefer “dual signature” segregated escrow accounts. Rodeo 1031 Exchange is always happy to provide a copy of our Fidelity Bond, Errors and Omissions Insurance and let our clients interact with our depositing bank. Contact Rodeo 1031 Exchange a t (3 1 0) 734 – 7570 or contact@Rodeo 1031.com.
What Are The Steps Of A Rodeo 1031 Exchange?
Contact Rodeo 1031 Exchange:
Review the entire transaction with tax and/or legal advisors. Your qualified intermediary cannot give you legal or tax advice.
Enter into an “assignable” contract to sell relinquished property, and we recommend a cooperation clause is included.
Preparation Of Relinquished Property Exchange Documents:
Send a copy of the sales contract to Rodeo 1031 Exchange. Rodeo 1031 Exchange will prepare the exchange agreement and assignment documents necessary for the sale of the relinquished property. If any proceeds from the sale of the relinquished property will not be used toward the purchase of replacement property that amount must be identified in the exchange documents. This amount will be considered boot and should be reported as income in the tax year it was received. Always communicate with your tax advisor.
Execute Exchange & Assignment Documents:
Exchanger must sign all exchange documents and the buyer of the relinquished property must sign the assignment agreement prior to the closing.
Exchange proceeds are transferred from the closing via wire transfer or check to a separate segregated escrow account set up by Rodeo 1031 Exchange. Dual Signature escrow account is preferable. This starts the clock for 45-day and 180-day deadlines.
Identification Of Replacement Property:
The Exchanger has 45-days from the sale to identify replacement property, and up to a total of 180-days to close on identified property; or until the date their tax return is due, including extensions, for the tax year in which the earliest transfer occurred, whichever date is earlier. Prior to the end of the 45-day identification period, the Exchanger must complete and forward to Rodeo 1031 Exchange, signed forms identifying the replacement property. Rodeo 1031 will supply a blank form on request.
Enter into an “assignable” contract to purchase replacement property and we recommend that a cooperation clause is included. The taxpayer purchasing the replacement property must be the same taxpayer that sold the relinquished property for a successful exchange. Always communicate with your tax advisor.
Preparation Of Replacement Property Exchange Documents:
Send a copy of the purchase contract(s) to Rodeo 1031 Exchange. Documents must be prepared for the replacement property prior to closing(s).
Execute Exchange & Assignment Documents:
Exchanger must sign all exchange documents and the seller of the replacement property must sign the assignment agreement. Executed documents must be sent to Rodeo 1031 Exchange prior to the closing.
Replacement Property Closes:
Inform Rodeo 1031 Exchange once the closing date is set. Complete a request for funds form with the date that the wire transfer or check request should be disbursed.
The exchange is complete if: 1) the Exchanger uses all exchange funds to acquire all properly identified replacement property; or 2) at the expiration of the exchange period. To report the exchange, your tax preparer should file an IRS Form 8824 with your tax return for the tax year in which you began your transaction. Rodeo 1031 will send you or your tax professional a file of all documents. Contact your tax preparer. Rodeo 1031 Exchange does not give tax advice.
*Rodeo 1031 is a qualified intermediary. Rodeo 1031 Exchange does not provide tax or legal advice, nor can we make any representations or warranties regarding the tax consequences of your exchange transaction. Property owners must consult their tax and/or legal advisors for this information. Our role is limited to serving as qualified intermediary to facilitate your exchange.