Recent Concerns Re: Choosing A 1031 Exchange Qualified Intermediary

There has been much written by the press recently regarding the selection of a qualified intermediary for your 1031 exchange transaction. The focus of the media has been on two (2) recent problems with qualified intermediaries. They do not fully explain that the two problem QI's were acquired by problem individuals over the last two (2) years. These two individuals acquired the 1031 exchange companies specifically to use client 1031 exchange funds to finance other operations and they got caught. It is unfortunate that two (2) individuals have cause so much harm to innocent parties for the rest of the solid 1031 exchange companies operating in the industry.

I thought that it would be a good time to revist what to look for when evaluating and selecting your qualified intermediary.

The 1031 exchange Qualified Intermediary (often referred to in the real estate industry as an Accommodator or Facilitator) is a crucial part of any successful 1031 exchange transaction. You should therefore exercise significant care when choosing your own Qualified Intermediary because of the critical role it will play in administering your 1031 exchange transaction.

The purpose of this article is to assist you, as a potential Exchangor, in developing an understanding of the risks involved in selecting your Qualified Intermediary and the questions to ask as part of your due diligence. The due diligence process should not be taken lightly.

Merry Christmas

Merry Christmas and Happy New Year to each and everyone of you, and best wishes for a safe, healthy and prosperous 2007. I look forward to chatting with many of you in 2007.

Selecting a SAFE Qualified Intermediary (Accommodator)

You may already know that 1031 tax-deferred exchange transactions are structuring using the services of a Qualified Intermediary or more commonly referred to to as an Accommodator, but did you know that they are not licensed, regulated or required to be bonded?

It's true! Anyone can set-up a Qualified Intermediary business and start administering tax-deferred exchange transactions. So, it is extremely important that you know what to look for, what questions to ask, and what to be wary of.

The Qualified Intermediary is a crucial part of any successful tax-deferred exchange, and you should therefore be very careful when evaluating Qualified Intermediaries. You can learn more by clicking here.

Tax-Deferred Exchanges of Personal Property

Did you know that personal property can be exchanged using Section 1031 of the Internal Revenue Code in addition to real estate. It is a little known fact, and many companies sell and buy personal property and pay the capital gain taxes when they could be exchanging and deferring their income taxes instead.

As corporations and individuals alike learn more about the income tax benefits of this powerful income tax-deferral strategy, we are beginning to see an increase in personal property tax-deferred exchanges.

The vast majority of tax-deferred like-kind exchanges involve real estate. Personal property 1031 exchanges only account for an estimated 5% of the total transactional volume. However, research indicates that the growth in personal property 1031 tax-deferred exchanges will be significant over the next decade.

The income tax consequences are phenomenal. Click here to learn more about tax-deferred exchanges and personal property assets.

Exeter Featured Expert in Roundtable Discussion on TIC Properties

I was a featured expert in a roundtable discussion on tenant-in-common investment properties (TICs) hosted by the California Real Estate Journal entitled "Fractionalized, but not fractured."

The TIC investment property roundtable consisted of experts from all aspects of the TIC Industry, including TIC Sponsors, a TIC Registered Securities Representative, a Qualified Intermediary (Accommodator), an attorney, and lender.

This expert panel discussed issues surrounding the explosive growth of the tenant-in-common investment property industry and how it has broken into the mainstream along with the challenges that come with such impressive growth.

Click here to view news release regarding this TIC Roundtable discussion.