A California escrow involves a 1031 tax-deferred exchange. The seller (exchanger) wants to use the proceeds from the sale of a rental property to acquire a replacement property. The escrow officer is coordinating with a qualified intermediary. Under IRS rules for a 1031 exchange, the exchanger must identify the replacement property within how many days of closing on the relinquished property?
Correct Answer
B) 45 calendar days
Under IRC §1031 and Treasury Regulations, the exchanger must identify potential replacement properties within 45 calendar days of closing on the relinquished property. The identification must be in writing and signed by the exchanger. The exchanger then has a total of 180 days from the sale to complete the acquisition of the replacement property.
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Related Topics & Key Terms
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Related Concepts
The closing process, also called settlement, is the final step in a real estate transaction where documents are signed, funds are disbursed, and title is officially transferred from the seller to the buyer.
Constructive notice is the legal presumption that a person has knowledge of information that is available through public records or visible inspection of the property, regardless of whether they actually knew about it.
A deed is a written legal document that conveys (transfers) ownership of real property from one party to another. It must be delivered to and accepted by the grantee to be effective.
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- → A buyer records a deed at the county recorder's office. What is the primary purpose of recording?
- → A buyer drives past the property and sees someone other than the seller living there and maintaining the yard. This observation should put the buyer on what type of notice?
- → In a covered purchase transaction, the borrower receives a final form showing the loan terms, cash to close, and settlement charges shortly before consummation. What form is this?
- → Along with the signed offer, Quinn Brooks delivers a check to demonstrate serious intent to complete the transaction if the offer is accepted. What is this deposit called?
- → On a settlement statement, the buyer's earnest money reduces the remaining cash needed to close. How is that item characterized?
- → On a settlement statement, an item increases the buyer's amount due at closing. How is that item characterized?
- → On the seller's settlement statement, the purchase price of $400,000 appears as what?
- → At closing, the purchase price of $350,000 appears on the buyer's side of the settlement statement. Is this amount a debit or a credit to the buyer?
- → Under TRID rules, the lender must deliver the Closing Disclosure to the borrower at least how many business days before loan consummation?
- → In an escrow closing, the escrow agent discovers that the seller has not yet provided the signed deed. What should the escrow agent do?
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A California real estate broker is holding a buyer's earnest money deposit. The broker must deposit the funds into the broker's trust account. Under California DRE regulations, by when must the broker deposit the funds?
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