Escrow & Title
A Nebraska '1031 exchange escrow' (Qualified Intermediary) holds the proceeds from the sale of a relinquished property in a segregated account to:
AEarn interest for the exchanger during the exchange period
BPrevent the exchanger from constructively receiving the funds, preserving the tax-deferred exchange✓ Correct
CPay closing costs on the replacement property
DSatisfy the mortgage on the relinquished property
Explanation
A key requirement of a valid 1031 exchange is that the exchanger must NOT have constructive receipt of the sale proceeds. The Qualified Intermediary holds the funds in a separate escrow account until they are applied to the replacement property purchase.
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