How Soon Is Too Soon To Identify A Property Of Interest For A 1031 Exchange?
Specifically, I will have 1031 money in the late fall around November. If, today, I put $1000.00 to reserve first right of refusal for property due to be released in December, have I negated my ability to do a normal 1031?
What is the trigger for actually “identifying” the target property? Is it interest money, earnest money, or the actual down payment?
I see lots of property I like today, but am afraid to place earnest money on it for fear of messing up the 1031 opportunity in the near future. Any thoughts or
strategies in addition to the reverse 1031?
As always, thanks for the thoughtful, helpful responses.
I signed a contract for a property under construction in April 2004. Project completion is scheduled for August 15.
I closed settlement on my (1031 exchange) relinquished property on Jun 7 and identified the property under contract to my exchange agent on Jun 12. When I settle on the replacement property in August, I will use exchange funds to complete the purchase.
It is not too early to pick out your replacement property. For the purposes of the 1031 exchange, the property is "identified" when you notify your qualified intermediary in writing. From the date of settlement on your relinquished property, you have calendar 45 days to "identify" your replacement property(ies).