How to Work with Your Qualified Intermediary to Ensure a Successful 1031 Exchange

A qualified intermediary is integral in any 1031 exchange of investment real estate. But the ultimate success of your 1031 exchange depends on how you interact with your qualified intermediary. In this article, we are going to talk about how to work best with your qualified intermediary in order to ensure a successful 1031 exchange of real estate.

Starting the Process As Early As Possible

The first pro tip to remember in any 1031 exchange is to start the process as early as possible. That means you should contact your qualified intermediary at the same time (or even before) you sign the sale agreement for your relinquished property. If you wait until the last minute, it makes things all the more difficult to ensure your 1031 exchange is set up for success.

Information to Provide Your Qualified Intermediary

When you reach out to your qualified intermediary to begin the 1031 exchange process, you will need to provide them with some initial information, including:

• Your Address

• Your Social Security Number or Tax ID Number

• Contact Information for the Title Closer and/or Escrow Company Facilitating Your Closing

• The Legal Description and Address of Your Relinquished Property

Providing these items right away can help jumpstart the process and set you up for success!

Minnesota 1031 Exchange Company

At CPEC1031, LLC we provide 1031 exchange services to clients throughout the state of Minnesota and across the United States. Our team of qualified intermediaries has over twenty years of experience and can help you through every aspect of your like-kind exchange of real estate. Contact us today to learn more about the 1031 exchange process and how we can help facilitate your next exchange. Find us at our primary office located in downtown Minneapolis.

• 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.

© 2022 Copyright Jeffrey R. Peterson All Rights Reserved

Who is Barred from Acting as Qualified Intermediary in Your 1031 Exchange?

We’ve talked extensively about the role of the qualified intermediary in a 1031 exchange. But choosing a qualified intermediary can sometimes be tricky because some people are excluded from acting as an intermediary. In this article, we are going to discuss you can and cannot act as your qualified intermediary in a like-kind exchange of real property.

Qualified Intermediary Exclusions

In a 1031 exchange, some people are excluded outright from acting as your qualified intermediary. Here are some of the parties who cannot act as your intermediary:

• Related Parties – your father, aunt, brother, sister, etc.

• Agents of the Taxpayer – your CPA, accountant, attorney, etc.

• Employees of the Taxpayer

• Your Real Estate Agent

Anyone who has acted as one of the above parties within the past two years is barred from being your qualified intermediary.

Working with a 1031 Company

In short, a qualified intermediary must be an independent third party with no prior association with the taxpayer conducting the exchange. The best course of action is to work with a company that specializes in facilitating 1031 real estate exchanges. These companies work on like-kind exchange transactions day in and day out and know the process backwards and forwards.

Contact a 1031 Exchange Professional

We work directly with CPEC1031, LLC to facilitate 1031 exchanges of real estate for our clients. The team of qualified intermediaries at CPEC1031 have decades of experience in the 1031 exchange industry. Our intermediaries will prepare your 1031 documents, advise you throughout your exchange, and answer any questions you may have. Give us a call today to speak with one of our like-kind exchange professionals about how you can defer capital gains taxes on the sale of real estate. Our main office is located in Minneapolis, but we work with clients throughout the state of Minnesota, and around the country.

• 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved

Can You Do a 1031 Exchange Without a Qualified Intermediary?

1031 exchanges and qualified intermediaries go together like Peanut Butter and Jelly. But does that mean that you need to hire a qualified intermediary for your exchange? In this article, we are going to talk about whether it’s necessary to hire a qualified intermediary for your 1031 exchange of real property.

In Most Cases

The short answer to the question of whether or not you need a qualified intermediary for a 1031 exchange is – in most cases. Most 1031 exchanges follow the safe-harbor protocol that requires the use of an intermediary.

Your qualified intermediary is essential to the process because they (among other things) hold your exchange funds for you while you wait for the process to complete. This keeps you from receiving boot and recognizing any gain during the process.

In addition to that, it’s advantageous to hire an intermediary because they act as your guide through the 1031 exchange process. Like-kind exchanges can be complex and there are many common traps for the unwary. Having an intermediary by your side is the best way to ensure your exchange will be a success.

Rare Exceptions

There are a few rare 1031 exchange cases in which a qualified intermediary is not necessary, but these are very uncommon.

CPEC1031

A qualified intermediary is your best bet for completing a successful 1031 exchange transaction. At CPEC1031, our intermediaries can help you prepare your 1031 documents, answer your questions, and advise you on the appropriate replacement property. With more than twenty years of experience, we have the skills needed to ensure that your exchange completes without any issues. Contact us today at our downtown Minneapolis office to learn more about our services and set up an appointment with one of our 1031 professionals!

• 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved

How to Change Qualified Intermediaries in a 1031 Exchange

Having a qualified intermediary by your side during the 1031 exchange process is essential to the success of your exchange. But not all intermediaries are created equal, and you may find that you don’t trust or get along with your intermediary once you’ve begun the process. If you find yourself in this situation, is it possible to switch intermediaries? In this article, we are going to talk about how to change qualified intermediaries in the midst of a 1031 exchange.

Swapping Intermediaries

If you have already begun the 1031 exchange process and transferred your exchange funds over to your intermediary, it’s probably best to stick with your intermediary until the 1031 process is complete. If you have not yet transferred your funds to the intermediary, it is much easier to switch intermediaries.

Do Your Due Diligence

While it is possible to change intermediaries midway through an exchange, doing so will cause a lot of headaches and potential delays. Make sure you do your due diligence and find an intermediary that you can trust well before you being the 1031 exchange process. The more prepared you are the more likely your exchange will succeed.

Qualified Intermediary Services

A 1031 exchange is a complex beast and requires the experienced hands of a qualified intermediary to ensure 100% tax deferral. At CPEC1031, our intermediaries have two decades of experience working with clients on their 1031 exchanges. We can answer all of your questions, advise you on property, and prepare your 1031 documents. Contact our intermediaries today to learn more about the services we provide and to get your 1031 exchange off the ground. Our main office is in downtown Minneapolis, but we work with clients throughout the United States.

• 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved

2 Roles that a Qualified Intermediary Fills in a 1031 Exchange

A qualified intermediary wears many hats in a 1031 exchange, but many people aren’t fully aware of what a qualified intermediary even does. In this article, we are going to discuss two roles that a qualified intermediary fills during the course of a 1031 exchange.

A Trusted Advisor

First and foremost, a qualified intermediary is a trusted advisor to the taxpayer conducting the 1031 exchange. You can (and should) go to them with any questions you have during the like-kind exchange process. They can also advise you on identifying appropriate replacement property.

A Neutral Third Party

A qualified intermediary also has to act as a neutral third party. In a 1031 exchange, it’s important that the taxpayer conducting the exchange does not acquire any of the net proceeds from the sale of the relinquished property. The qualified intermediary can hold onto these proceeds as a neutral third party until it comes time to redeploy these assets into the replacement property.

Minnesota Qualified Intermediaries

CPEC1031 employs skilled and experience qualified intermediaries who can help facilitate your next real estate exchange. We have been providing like-kind exchange services to our clients for over two decades. We put that level of experience to work on each transaction we facilitate. Contact us today to learn more about the 1031 exchange process and how we can help you through your next 1031 exchange. You can find us at our primary office located in downtown Minneapolis or at one of our satellite offices located around the United States.

• 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved