W
qualifies as a 1031
exchange.
But constructive receipt is
slightly more elusive.
Constructive receipt occurs
So what is constructive when the exchanger has
receipt and how is it the right to receive or
different than actual control funds, even if he or
receipt? Actual receipt is she does not have direct
When done correctly, a easy to identify – the access to the funds. As an
#1031 exchange can be a exchanger directly receives example, if an exchanger
fairly straightforward the sale proceeds from receives the proceeds in
process. However, there is the relinquished property. the form of a check, then
often one area that It also doesn’t matter what he or she is deemed to
catches potential form the funds take – cash have constructive receipt
exchangers off guard. The or wire transfer into an even if they never cash
concept of constructive account. The bottom line the check.
receipt often torpedoes is if the exchanger has the tax deferred nature of direct access to the funds an exchange, and at any time, the subjects the exchanger to transaction no longer
immediate capital gains
taxes.
20
Constructive Receipt:
A Hidden 1031
Exchange Danger