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W Texas | Just a few random questions about 1031.
If you sell a farm and want to do a 1031, how can you be certain the intermediary won't make off with the money while you are land hunting? Especially if it is an extremely large sum? My understanding is the intermediary has the cash in a joint account? Is either party able to independently remove cash?
Can you use proceeds to purchase land in Canada or other places outside the US? I'm almost certain the answer is no, but how about if you purchase farmland outside the US through a US based shell corporation that you set up and then sell the corporation to yourself? One possible scenario would be to 1031 into a farm here, mortgage the farm for 70% loan to value, and use proceeds of loan to purchase outside the US. The problem with this strategy is you are putting 30% of capital at risk and there aren't many US farms that will cash flow with 30% down.
Is it possible to take part of the proceeds up front, i.e. Take your basis cash out and use the capital gain sum in the 1031?
If you sign an option contract with nonrefundable fully fungible earnest money up front, how is that handled tax wise? And if buyer paid 5% interest Until deal is closed, my understanding is the interest would be ordinary income?
Thanks in advance. BTW I don't contribute on marketing thread much, but help out when I can on several other threads. | |
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Some general 1031 questions.
