Thanks for checking out the Real Estate Today podcast. We’re talking with Megan McMahon and reverse exchanges.
Bobs Blogcast 62 – Megan McMann – Reverse Exchanges
Bob: I’m Bob Nelson, a real estate investor and broker with Ty Quest real estate investments joining me again today is Megan McMahon. Megan is the manager of Cascade exchange services of Eugene which is a branch of Cascade Escrow on Cascade title of Eugene.
Megan is also a CPA by professional designation, so as an exchange facilitator and also a CPA she has extreme knowledge as well as extreme expertise which is very, very beneficial with the tax deferred exchange.
Megan thanks for joining me again today.
Megan: Thank you.
Bob: Absolutely. Let’s get into a topic that’s an interesting one. In today’s market, you may find the replacement property that you would love to own and unfortunately it’s owned by a guy who’ll sell it to you, but they say, “Hey, I’m not waiting around for you to sell the property you’re going to be using to fund into the purchase of mine. I’m not waiting for you to go out and do your thing, if you want it you got to buy it”.
You look around and yes you do have enough money to pull the thing off. Problem comes if I use my own personal funds to go out and buy this property, now I own it, how do I sell the one I’m trying to get rid of, and buy one I already own for myself. I can’t do a tax differed exchange can I?
Megan: You can’t, but if we back it up a little bit, then there is an option to save the transaction.
Bob: Tell me about that, it’s called a reverse exchange.
Megan: Yes, so if you’re out looking at you find the perfect replacement property prior to selling your relinquished property, you can do an exchange, but what the IRS has said is that you can’t be entitled to both properties at the same time.
Bob: Okay.
Megan: So what we do is Cascade forms a special purpose LLC and we take title to one of the properties for you.
Typically you would provide us the cash and we would purchase the replacement property, and then we just sit on it.
Bob: Okay, you’re going to hold it for me or just park it for me and until I get around to be able to sell the property I want to get rid of, my relinquished property.
Megan: Exactly, so from your date of purchase then, you have 45 days to identify what you want to sell, and you have 180 days to sell that relinquished property.
Bob: If you think this would work for you contact Megan at Cascade exchange services.
Megan thanks for joining me again today.
Megan: Thank you.
Bob: Megan can be reached at Cascade Exchange services of Eugene 541-687-2233. I’m Bob Nelson real estate investment broker with Pat Quest real estate investments.
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