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  • Added for You - Reveres Exchanges - Not As Difficult As You Think!

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    with a Reverse Exchange there are some contract considerations: Generally the purchase contract is assignable from the exchanger to a Limited Liability Company (LLC) setup by a qualified int
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    A Reverse Exchange may be the best alternative to save a 1031 deferred exchange transaction when a taxpayer needs to purchase their replacement property prior to the sale of their relinquished property. The mechanics of a reverse exchange may seem complicated, so the following general guidelines will help. Before starting, an exchanger should review their plan with their tax advisor and a qualified intermediary. Discuss all the fees involved, the bank’s lending fees if utilizing bridge financing, exchange fees, and the tax on any cash proceeds received. Review the actual long term capital gain and depreciation recapture. This will help determine if the benefits of a reverse exchange outweigh the costs involved.

    When an exchanger decides to proceed with a Reverse Exchange there are some contract considerations: Generally the purchase contract is assignable from the exchanger to a Limited Liability Company (LLC) setup by a qualified inte

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    d property. The mechanics of a reverse exchange may seem complicated, so the following general guidelines will help. Before starting, an exchanger should review their plan with their tax advisor and a qualified intermediary. Discuss all the fees involved, the bank’s lending fees if utilizing bridge financing, exchange fees, and the tax on any cash proceeds received. Review the actual long term capital gain and depreciation recapture. This will help determine if the benefits of a reverse exchange outweigh the costs involved.

    When an exchanger decides to proceed with a Reverse Exchange there are some contract considerations: Generally the purchase contract is assignable from the exchanger to a Limited Liability Company (LLC) setup by a qualified int

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    isor and a qualified intermediary. Discuss all the fees involved, the bank’s lending fees if utilizing bridge financing, exchange fees, and the tax on any cash proceeds received. Review the actual long term capital gain and depreciation recapture. This will help determine if the benefits of a reverse exchange outweigh the costs involved.

    When an exchanger decides to proceed with a Reverse Exchange there are some contract considerations: Generally the purchase contract is assignable from the exchanger to a Limited Liability Company (LLC) setup by a qualified int

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    actual long term capital gain and depreciation recapture. This will help determine if the benefits of a reverse exchange outweigh the costs involved.

    When an exchanger decides to proceed with a Reverse Exchange there are some contract considerations: Generally the purchase contract is assignable from the exchanger to a Limited Liability Company (LLC) setup by a qualified int

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    with a Reverse Exchange there are some contract considerations: Generally the purchase contract is assignable from the exchanger to a Limited Liability Company (LLC) setup by a qualified intermediary such as Bankers Escrow. Typically, the phrase and or assigns after the buyer’s name will suffice. If the exchanger has a contract in place for the replacement property purchase, it will need to be amended, assignable to the LLC.

    The mechanics for a Reverse Exchange are as follows:

    Phase 1: The LLC purchases and parks the replacement property. Remember that the LLC is not using any of its own funds to purchase. This will come from the bank and/or the exchanger and takes time to obtain. Both the identification and completion deadlines are triggered at purchase date of the new property by the LLC. The exchanger will have 45 days to identify their old property and 180 days to sell it. They must purchase the parked property from t

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