1031 and auctions is it possible?

Question

During any part of the 1031 process is it possible to use the cash for auctions?

Bill B. · Answer

Gonna be hard since you’re not going to have the cash, the QI is, and you’re supposed to identify the properties. Maybe @Dave Foster has dealt with this? He’s definitely a fountain of knowledge.

Dave Foster · Answer

@Jonathan Watt, There's nothing to prevent you from using 1031 proceeds to purchase properties at auction other than logistics. The 45 day identification period which goes hard at day 46 is going to make you probably only look at auctions that are happening during that 45 day period. Because the risk of not winning an auction if you put one on your list but the auction doesn't happen until after day 45 is pretty large.

Even more than that though is the logistics of transferring funds for purchase. And that totally depends on the municipality/entity running the auctions. Every state/county/city handles theirs differently. Some require cash in two hours. Some give you 30 days. Obviously a 2 hour window is pretty tight to be doable. But 30 days probably no problem at all.

1031 and auctions is it possible?

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