Glossary of Terms

Exchange Proceeds 2019-04-24 08:00:00

Exchange Proceeds

Exchange proceeds are cash proceeds from a transfer of relinquished property held in a qualified escrow account set up by a qualified intermediary whereby the funds are distributed only after certain contractual agreements are fulfilled. For example, if an investor sells an investment property for $800,000 and pays off a $500,000 mortgage against the property, then the proceeds would be $300,000. In order to qualify for a 1031 exchange, these exchange proceeds must be distributed directly to a qualified intermediary.