Returning Exchange Funds Used to Make Earnest Money Deposits If A Purchase Falls Through

There are many uncertainties surrounding the acquisition of real estate. Should the taxpayer ultimately decide not to acquire the property, the escrow agent must wire the funds back to the QI. Once received by the QI, the funds may be used to acquire other properly identified replacement property. If the funds are not wired back to the QI, the taxpayer will be subject to tax on these amounts.

Strategic 1031 Exchange Advisors, LLC, a Georgia limited liability company, is a qualified intermediary for 1031 exchanges only. It is not an accounting firm, law firm or registered investment professional and therefore is not qualified to give accounting, tax, legal or investment advice, and, further, cannot act in an agency capacity on behalf of its clients. This website is for informational purposes only and does not and is not intended to constitute accounting, tax, legal or investment advice. We advise you to consult with your accountant, attorney and investment professional on all matters related to your exchange.