Can the proceeds from the relinquished property be used to make improvements to the replacement property?
Yes. This is known as a Build-to-Suit or Construction or Improvement Exchange. It is similar in concept to a reverse exchange. The taxpayer is not permitted to build on property she already owns. Therefore, an unrelated party or parking entity must take title to the replacement property, make the improvements, and convey title to the taxpayer before the end of the exchange period.
Yes. This is known as a Build-to-Suit or Construction or Improvement Exchange. It is similar in concept to a 1031 reverse exchange. The taxpayer is not permitted to build on property she already owns. Therefore, an unrelated party or parking entity must take title to the replacement property, make the improvements, and convey title to the taxpayer before the end of the exchange period.
Related Questions
- Can I sell my relinquished property and use a separate bank account to hold the proceeds until acquiring the replacement property?
- Can the proceeds from the relinquished property be used to make improvements to the replacement property?
- Can a 1031 Deferred Exchange be used to build-to-suit new improvements on Replacement Property?
