It’s important to involve a qualified intermediary in your 1031 exchange. However, not just anyone can act as your intermediary. There are certain restrictions that apply. In this article, we are going to discuss whether or not your sibling can act as your qualified intermediary in a 1031 exchange.
Qualified Intermediaries
First off, let’s offer a quick reminder of what an intermediary does and why it’s important to involve one in your 1031 transaction. A qualified intermediary serves many functions in a 1031 exchange. They are your adviser throughout the exchange process. They can put together all the necessary 1031 documentation for you. They can ensure that you do everything in your power to successfully complete the 1031 exchange.
Disqualified Parties
Some parties are disqualified outright from acting as your 1031 intermediary. Anyone who is related to the taxpayer conducting the exchange by blood or business affiliation is excluded from acting as the qualified intermediary on the transaction. So your blood relatives (including your sister or brother) would not be allowed to act as your 1031 exchange intermediary. Your intermediary needs to be someone who is a neutral third party and unbeholden to you (the taxpayer).
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.
© 2023 Copyright Jeffrey R. Peterson All Rights Reserved