1031.Exchange INTELLIGENCE NETWORK
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TRANSACTION & CLOSING

Escrow

Also called: closing escrow · escrow account

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PLAIN-ENGLISH DEFINITION

An arrangement in which a neutral third party holds money, documents or instructions pending satisfaction of stated conditions.

What it means in practice.

Escrow functions differ by state and transaction. Exchange funds held under a Section 1031 safe harbor should not be confused with an ordinary contract deposit escrow.

Why it matters.

Use precise labels because “escrow” can refer to very different legal and operational arrangements.

Additional notes.

Escrow functions differ by state and transaction. Exchange funds held under a Section 1031 safe harbor should not be confused with an ordinary contract deposit escrow.

CONNECTED LANGUAGE

Related definitions.

Exchange MechanicsQualified escrow accountAn escrow arrangement meeting specified safe-harbor requirements that can restrict the taxpayer’s access to exchange funds.Transaction & ClosingEarnest moneyMoney deposited to support a buyer’s obligations under a purchase contract.Transaction & ClosingClosing costsCosts charged in connection with purchasing, selling, financing and closing real estate.
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