Federal exchange Services, LLC

1031 Exchange San Antonio
1031 Exchange - Getting Started

45-Day Period, Relinquished Property Closing

Step One:
Using the parameters of your exchange use our Capital Gains Tax Calculator (Left Menu) to determine if an exchange is practical,  for example:

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Is there enough Capital Gain to justify the cost of the exchange?

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Is the basis in the Relinquished Property too low to justify the purchase of the Replacement Property?

Due to each transaction’s uniqueness, it is important that you consult your attorney or tax advisor to maximize your 1031 exchange objectives. Proceed to Step Two; you do not need to have your Replacement Property identified at this stage.

Step Two:
Complete your purchase and sale agreement for the Relinquished Property, adding to the agreement the following language: It is the intent of (Exchanger) to utilize this transaction as part of a tax deferred exchange pursuant to Internal Revenue Code Section 1031, as Amended and the Treasury Regulations Promulgated hereunder.

Step Three:
Execute the purchase and sale agreement and deliver it to the closing agent to Open escrow. Alert your closing agent that the transaction will be a 1031 exchange. 

Step Four:
Notify Federal Exchange Services of the name, address, and telephone number of the closing agent as well as the agent’s file number. You will be assigned an Exchange Coordinator who will personally see that all aspects of your 1031 Exchange are addressed.

Step Five:
Our Exchange Coordinator will contact the closing agent to obtain the necessary information to open the exchange file and prepare the 1031 Exchange Addendum as well as Assignment Documents to deliver to the closing agent. The closing agent will then contact you to sign the 1031 exchange documents as well as closing documents.

Step Six:
After the sale has closed, the closing agent will wire transfer the proceeds into Federal Exchange Services' Qualified Exchange Escrow Account. Upon receipt of the funds and the closing statement, we will issue a Security of Funds Instrument which will include the amount of proceeds we received (which should be the same as the closing statement). An additional  letter will also inform you of the 45-day period to identify the Replacement Property(s) and contain a form to communicate with us the specifics of the Replacement Property(s). During this 45-day period, you may identify up to 3 Replacement Properties subject to the 200% limitation. As well, the 180-day deadline for closing the transaction will also be identified. For an estimate of the deadlines, use our Exchange Deadline calculator button (Left Menu). 

You are now in the 45-day window to identify your Replacement Property.

135-Day Period, Replacement Property Closing

Step Seven:
Prior to the end of the 45-day identification period you will fax or e-mail us a copy of the Replacement Property(s) form(s) that we supplied, with the Replacement Property(s) identified. Make sure it is fully signed by each named Exchanger. 

Step Eight:
Complete your purchase and sale agreement adding the 1031 Exchange Clause as you did in the Relinquished Property transaction. You may then execute the agreement and  Open Escrow as you did in the Relinquished Property transaction; notifying the closing agent that this will be a 1031 exchange and that Federal Exchange Services will be the Qualified Intermediary. There is no requirement that the closing agent for the Replacement Property sale be the same as the Relinquished Property purchase. 

Step Nine:  
Notify our Exchange Coordinator of the closing agent’s contact information. We will also need to be informed of how much of your proceeds you will want to use on this transaction as well as the approximate date of when your purchase will close.

Step Ten:
Our Exchange Coordinator will then contact the closing agent to obtain any additional information and to send the exchange documents to the closing agent. After all the documents have been signed the closing agent will send Federal Exchange Services the closing statement and we will wire the funds into the escrow account. The purchase can now be recorded and you have completed the exchange. 

The closing agent should deliver to you all relevant closing documents used in the transaction. When you have closed on the last identified Replacement Property(s) or if the 180-day period has run, Federal Exchange Services will return any unused portion of the Relinquished Property proceeds. You should endeavor to use all of the proceeds as any returned proceeds may constitute BOOT and you may be taxed on the Boot received.

At the tax year end, you will use Internal Revenue Service Form 8824 “Like- Kind Exchanges” to report the transaction.
Federal Exchange Services, LLC - Capitol Building watermark

Federal Exchange Services, LLC.
Energy Plaza
8620 N. New Braunfels, Suite 427
San Antonio, TX 78217
Telephone: (210) 828-9097
Fax: (210) 828-1655