The Treasury Regulations that were written to govern the 1031 exchange industry set forth several safe harbors for facilitating delayed 1031 exchanges. Before these regulations were issued there were all kinds of crazy arrangements to create an exchange. The qualified intermediary modality has become the dominant 1031 safe harbor.
What is a qualified intermediary? Is it a person that can give you tax and legal advice? No. It needs to be a person that is unbeholden to the taxpayer conducting the exchange. Your agent, relative, attorney, accountant, etc. would all be excluded from becoming your qualified intermediary. Essentially, a qualified intermediary is a third party administrator who facilitates exchanges of real estate.
It takes a village to raise a 1031 exchange. You need to involve your entire team in the process. Your banker, accountant, real estate broker, title company, and qualified intermediary are all essential aspects of your 1031 team. This team will help you make the most informed decisions throughout your exchange.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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