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.
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