The mere act of accepting the check, made payable to the
exchanger (even with no intention of cashing it themselves),
cancels the exchange before it really begins. Even if the
exchanger plans to immediately endorse the check over to the
qualified intermediary.
Because of the concept of constructive receipt, it is critical that
any investor planning to conduct a 1031 exchange brings a
qualified intermediary on board before the relinquished property
is sold. This eliminates the possibility of constructive receipt.
*****
If a 1031 exchange is in your future, visit our website
http://www.qualifiedintermediary.net/ to learn more about these
powerful tax deferral tools and our qualified intermediary and
replacement property locator services.
Constructive Receipt:
A Hidden 1031
Exchange Danger
21