What are the rules about canceling an exchange?
It is possible to cancel an exchange but the cost and timeframe in which you can terminate a deal varies from facilitator to facilitator. The issue with exchange termination is the constructive receipt concept. Section 1031 requires the taxpayor not have actual or constructive receipt of the exchange proceeds. If a taxpayor can simply ask for and receive the funds at anytime, the exchange procedure may not be defendable. Therefore, it is possible to terminate an exchange at the following times: • Anytime prior to the close of the relinquished property sale. • After the 45th day and only after you have acquired all the property you have the right to acquire under section 1031 rules. • After the 180th day. Please contact us directly if you have additional questions in regards to canceling your exchange.
