Many people are aware that working with a qualified intermediary is the best course of action to complete a successful 1031 exchange. However, many taxpayers don’t realize how essential it is to hire a qualified intermediary early in the process of conducting a 1031 exchange. In this article, we discuss the importance of hiring a qualified intermediary early in the 1031 exchange process.
Timing is Everything
In a 1031 exchange, timing is everything. The entire exchange must be completed within 180 days after you sell your relinquished property, and you must identify your replacement property within the first 45 of those days.
With so many tight deadlines, it’s a best practice to plan ahead and work with a qualified intermediary before you begin the 1031 process.
You must hire a qualified intermediary before you close on the sale of your 1031 property. Once you receive the funds from the sale, it’s too late to conduct a 1031 exchange, as you will have received taxable “boot” in the form of the sales proceeds. This is why it’s essential to reach out to a qualified intermediary early on in the 1031 exchange planning process.
1031 Exchange – a Tax-Deferral Tool for Savvy Investors
A 1031 exchange is a tax-deferral tool that has been utilized by savvy investors for over 100 years. Reinvest the sales proceeds from your relinquished property into a new replacement property and defer up to 100% of your capital gains tax burden on the sale. Work with a qualified intermediary throughout the process to ensure that you are meeting all the requirements set out in section 1031 of the Internal Revenue Code. CPEC1031, LLC has been working on like-kind exchanges for decades and can help you with all the details of your next 1031 exchange!
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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