1031.Exchange INTELLIGENCE NETWORK
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CORE 1031

Actual receipt

Also called: receipt of proceeds

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PLAIN-ENGLISH DEFINITION

The taxpayer physically or directly receives money or property.

What it means in practice.

Direct receipt of sale proceeds can undermine a deferred exchange because the transaction must satisfy rules designed to prevent the taxpayer from having unrestricted access to the proceeds.

Why it matters.

This is why exchange documents and closing instructions are normally arranged before the relinquished-property closing.

Additional notes.

Direct receipt of sale proceeds can undermine a deferred exchange because the transaction must satisfy rules designed to prevent the taxpayer from having unrestricted access to the proceeds.

PRIMARY / REFERENCE SOURCES

Read the source material.

irs.gov ↗irs.gov/faqs/sale-or-trade-of-business-depreciation-rentals/sales-trades-exchanges/sales-trades-exchanges-2irs.gov ↗irs.gov/publications/p544
CONNECTED LANGUAGE

Related definitions.

Core 1031Constructive receiptA tax concept under which money may be treated as received even if it is not physically in the taxpayer’s hands, because it is available or controlled by the taxpayer.Core 1031Exchange fundsSale proceeds being held and deployed as part of the exchange structure.
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