- YOUR EXCHANGE FUND -

(Where's My Money?)

If the QI sells your property then immediately buys its replacement,

the sale proceeds would never be "held"

(QI would have the proceeds applied to the purchase price).

Only if the purchase is "delayed" would the sale proceeds be "parked" or escrowed

in an interest-bearing, insured "Exchange Account"

to be used only to make a deposit and pay the price to buy the property

you designate and for reasonable authorized 1031 expenses.

You will get "bank-like statements" and your QI

will issue "proof of funds" letters as you direct.

You may also list the funds as assets

on your financial statement like bank deposits.

But if you fail to timely identify replacement property (within 45-days),

the 1031 is Dis-Qualified and,

the funds in escrow must be disbursed per your instructions.

Likewise, if you do identify replacement property but,

fail to timely complete the exchange (within 180-days),

the 1031 is Dis-Qualified and,

the funds in escrow must be disbursed.

Remember that the QI must NOT be your "AGENT"

otherwise money delivered to the QI would be considered "received" by you through your "agent" and,

the 1031 would then become Dis-Qualified. 

So please don't expect to treat the Exchange Account like your checking or savings account. 

If you need $10,000 for an "emergency"

your QI might want to give it to you but cannot do so by Law (for your own sake)

As an alternative to both the QI and you committing tax fraud,

please just borrow the $10,000 from a bank.