Can exchange proceeds reimburse my personal funds that I used for an EMD?
Should the Exchangor decide to utilize their personal funds for the EMD, they are eligible to be reimbursed via exchange proceeds at the closing of the replacement property as long as there are sufficient funds. This is executed at the closing of the replacement property and requires coordination between the Closing Agent and the Qualified Intermediary. Exchange Proceeds cannot be specifically allocated so in order for the personal EMD funds to be refunded, there must be adequate funds to do so. It’s recommended to discuss this with your QI prior to providing the EMD.
https://atlas1031.com/blog/earnest-money-deposits-in-a-1031-exchange/
