Sold my portion of a storage business in 2014, taking payouts in time

3 Replies

I sold my 1/3 portion of a self storage business in 2014 and am taking payments over time. Is there any way I can use this money for other investments and save on the tax consequences? 1031 exchange or have I overstepped the timeline?

Thanks for any help

@Dave Bicket  

  not an expert here but I think since the deal is done, and you have received monies your ability to 1031 is done as well..

It's too late.  The 1031 Exchange would have to be in place before the close of the sale transaction and the seller financing would have to be held by the Qualified Intermediary.  You would still be subject to the same 45/180 day rules as well.  At this point, the payments, and the ultimate pay off, are just loan payments and not sale proceeds and therefore do not qualify for 1031 Exchange treatment.

Welcome to BP, Dave!

I'd say you have probably passed the requirements, you have already touched the funds!

Saying you already sold, I assuming so, you set up a 1031 with the settlement agent and there are escrow requirements.

If you have a note, you can sell the payments, depends on many factors but a partial interest will carry a larger discount.

Check with your bank on factoring payments or assigning the note as collateral for a loan, that may substitute a down payment, perhaps more depending on the note.

If you get into a seller financed deal you can use that note as additional collateral as well.

Good luck :) 

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