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1031 Tax Deferral Strategies for Real Property   
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Home  |  Why Liberty1031  |  The Liberty 1031 Exchange Process  |  ID of Replacement Property

Step 3

Acquisition of Replacement Property
Within 180 days, when you are ready to close on your Replacement Property, notify your Exchange Coordinator and fax the Contract for Purchase and your Authorization to Release Funds to Liberty 1031 at 866.903.6632.

Your Exchange Coordinator will contact you to confirm the details, and then e-mail the Phase 2 documentation to the Settlement Agent. This documentation must be signed at your closing. In addition, the Buyer on your Settlement Statement must be changed to Liberty 1031 Exchange Services, LLC, as Qualified Intermediary.

Upon your approval, Liberty 1031 will sign the Settlement Statement, which is usually faxed prior to or during closing. The closing proceeds are then wired from Liberty 1031 to the Settlement Agent.

At this time, your successful 1031 Exchange will be complete.

Napkin Rule
You must buy a Replacement Property of equal or greater value to the Relinquished Property in order to completely defer the applicable capital gains tax. If you purchase a property of lesser value, you will be responsible for any tax on the difference. You must also use all the cash proceeds from the sale on your purchase in order to completely defer the applicable capital gains tax. If you do not use all your proceeds on the purchase, you will be responsible for any tax on the difference.
 

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Liberty 1031 Resources

Access these useful resources to learn more about 1031 Exchanges on your own.

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