You may not use any of the
net proceeds from the sale of your property for
anything except investing in the replacement property,
without tax consequences.
If you identify property that you want to buy,
but decide after day 45 that you don’t want
to purchase it, and you want the proceeds returned
to you, this would be an early disbursement and
contrary to the Exchange Agreement you entered
into with the Qualified Intermediary. The proceeds
will be disbursed to you on the 181st day.
You will have a reduced basis in your replacement
property, resulting from the carry-over basis
of the property you sell. If you eventually sell
the replacement property, you will realize more
gain than if you had acquired the property through
a straight sale and purchase. |
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