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A simultaneous exchange occurs when the relinquished
and replacement properties close at the same time. This seemingly simple
transaction is littered with pitfalls. However, the use of a Qualified Intermediary
such as OREXCO assures the Exchanger that
he does not have constructive receipt of his funds thus ensuring the preservation
of safe harbor treatment under the Treasury Regulations. In the simultaneous
exchange, OREXCO transfers the property to
the proper entity and instructs the escrow/closing agent with respect to
the disposition of sale proceeds. It is incumbent on the Exchanger to contact
OREXCO prior to closing on the purchase and
sale of the relinquished and replacement properties.
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