Before the Sale - Consult with your real estate attorney and CP A - Confirm eligibility: Is your current property held for investme nt or b usiness use? - Select and engage a Qual ified Intermedi ary (QI) - Create a plan for the replaceme nt p roperty: land, reno vation, or ground -up buil d - Identify contractor , architect, lender , and other professionals - Discuss forming a Special Purpose Entity (SPE) with your QI an d atto rney Upon Sale of the Origi nal Property - Ensure sale proceeds are transferred to your Qualifie d In te rmediary - Start the 45-day identification clock - Identify up to three potential replace ment propertie s in writing - Form your Specia l Purpose Entity (if require d) - T ransfer title of the new land or build site to the SPE/QI During the Build (180-Day Deadline) - Begin co nstruction immedi ately-no de lays - Ensure improvements are made to the property owned by the QI/SPE - Keep detailed records of all costs, materi als, and lab or - Reinvest the e ntire value of the orig inal pro perty into land + impro vements - W ork with your team to meet the 180-day completion deadline Final Step: Closing the Exch an ge - Improvements must be completed and reflecte d in the prope rty val ue - T itle of completed property must transfer to you by the 180th day - Confirm with your tax advisor that exchange qualifies for ful l ta x d eferral - Retain all documentation for IR S a udit suppo rt

Pro T i p: If the improvements aren't completed in time, the unspent funds could trigger capital gains taxes. T iming is everythi ng.

Questions? Let's T alk Early . Peter Manci ni - Pen Realty Email: pmancini@penrealty .net | Phone: 917-916-5126 Subscribe: Y ouT ube.com/@pmpenrealty Donate: https://give.caringkindnyc.o rg/te am/63010 0