Most people conducting 1031 exchanges utilize the services of a qualified intermediary. But there are rules surrounding who can act as your qualified intermediary. If you use a disqualified person to be your qualified intermediary, the presumption is that your 1031 exchange is blown because you’re supposed to use someone that’s neutral and unbeholden to you.
If you’re using your attorney to act as your qualified intermediary and that attorney has provided you legal services within the last two years, they are disqualified from acting as your intermediary.
It’s a good idea to have a representation and warranty from the party acting as your intermediary that they’re not a disqualified person. Even more importantly, don’t use a disqualified person as your qualified intermediary. The fees to hire a qualified intermediary are relatively nominal – especially when dealing with commercial real estate transactions. Use a professional, independent intermediary company that focuses on providing 1031 exchange services, rather than trying to use a friend or relative.
Section 1031 is a Powerful Tool for Tax Deferral
A 1031 exchange is a powerful tool for deferring taxes on the sale of qualifying real property. Any taxpayer can avail themselves of the many benefits of a 1031 exchange. However, there are a variety of rules that you must follow in order to complete a successful exchange. That’s why it’s essential to work with a qualified intermediary who has experience in the 1031 exchange industry. CPEC1031, LLC has over two decades of experience facilitating 1031 exchanges and can work with you to ensure your like-kind exchange is a success.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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