A common question we get from 1031 exchange clients is whether or not the qualified intermediary needs to be located in the same state in which you are conducting your 1031 transaction. For example, if you are conducting a like-kind exchange of real estate in California, can you hire a Minnesota qualified intermediary to facilitate your exchange?
Qualified Intermediary Location
The beautiful thing about section 1031 of the Internal Revenue Code is that it is a federal statute and applied uniformly (at least at the federal level) among all of the states.
So a qualified intermediary doesn't need to be located in the state where your sale is occurring or for that matter in the state where your replacement property is to be acquired.
Local Customs & Practices
That being said, qualified intermediaries do need to be familiar with the customs and practices where the real estate transactions are occurring but do not need to be physically located in that vicinity in order to service and facilitate the exchange.
- 1031 Hotline: If you have questions about the role of a qualified intermediary in a 1031 exchange, feel free to call me at 612-643-1031.
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