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EXCHANGE BASICS


An Amherst 1031 Exchange is an investment property swap without taxes. Like-kind real estate or personal property is traded for other like-kind real estate or personal property. Structured pursuant to § 1031 of the Internal Revenue Code, state, federal and depreciation recapture taxes are deferred. The funds that would have been used to pay taxes are instead invested in the new property. Buying power is increased.

WHENEVER INVESTMENT PROPERTY IS BEING SOLD

Reserve the right to close the Sale as part of an Exchange; leave options open.

INTERRELATEDNESS

To be an exchange, the Sale and Purchase must be interrelated. The QI (Qualified Intermediary) establishes this important relationship via documentation whereby Amherst becomes the substituted Seller of the “old” property and the substituted Buyer of the “new” property.

IDENTIFICATION PERIOD

45 days following the close of the Sale Amherst must receive a dated and signed list of potential replacement properties – unless all are purchased prior to the 45th day.
Please review our Letter of Identification Checklist

EXCHANGE PERIOD

180 days following the close of the Sale

TYPES OF EXCHANGES

CONCURRENT or SIMULTANEOUS EXCHANGE

Purchase closes same day or 1st business day following the close of the Sale

DEFERRED EXCHANGE

45 days to ID; 180 to complete

PART EXCHANGE / PART SALE OF PERSONAL RESIDENCE

You can sell a percentage of a property as an exchange if it has been held for productive use in a trade or business or for investment.

IMPROVEMENT or CONSTRUCTION EXCHANGE

QI can take title to Replacement Property and pay for improvements managed by client to utilize excess exchange funds and increase property value. QI sells improved property to client within 180 days.

REVERSE EXCHANGE

Replacement property (the new property) is purchased before relinquished property can be sold.

 

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