Re: 1031 exchange question. Is this illegal?

I don't see why it wouldn't be legal - you would be in effect buying an option to purchase, with the actual transfer of title not to take place until later.

That does pose a risk - you will have very little time to sell your current place and get the money to close escrow on the new one. So get more time if you can.

Re: 1031 exchange question. Is this illegal?

We would like to sell a rental home and do a 1031 exchange.

We are under a lease with the tenant till end of Sept. which is quite a few months away. The tenant will not leave before then.

We have found a property that looks pretty good. Good properties that meet the criteria that we have set, don't come by often.

We are afraid to do a reverse 1031 exchange and give title to the new property to a 1031 intermediary via an LLC. It does not appear safe.

What if we agree on a price for the property with the Seller and gave the seller a deposit of say 25k to hold the property till end of Oct and tell the seller that if we don't buy the property at the agreed price by end of Oct he can forfeit the deposit? We openly tell the seller that we are doing this to do a 1031 exchange.

Is this illegal? ============ Firstly, if you intend to sell the property, you're not doing an exchange - by definition.

Secondly, you may enter into any kind of contract you want with your accommodator or seller, but if you don't meet the requirements of an exchange, you won't have one. You MUST identify the property (or a list of properties, although only one is needed to complete the exchange) within 45 days of entering into the exchange, and must compete the exchange in 180 days. Note that 180 days is not six months.

That is incorrect. If you sell without meeting the requirements of section

That is incorrect. If you sell without meeting the requirements of section

============ A sale and an exchange are two different creatures. I stand by my statement.

Yes, you always do. No matter that it is the qualified intermediary that is doing the sale.

I stand by my statement.