Qualified Intermediary vs. Third-Party Administrator – What’s the Difference?

There are a lot of confusing terms in the realm of 1031 exchanges. Two you may hear quite often are “Qualified Intermediary” and “Third Party Administrator.” In this article, we are going to discuss the distinction between these two common 1031 exchange terms.

Qualified Intermediary

A qualified intermediary is a like-kind exchange expert who assists taxpayers through the 1031 exchange process. Here are a few essential items that a qualified intermediary can help you with during the 1031 exchange process:

• Document Preparation. There are numerous documents that need to be prepared in any 1031 exchange. Attention to detail is paramount on these documents as even a small error can jeopardize your exchange. Your intermediary can prepare all of these documents for you and make sure you’ve covered all your bases.

• Replacement Property Identification. You need to properly identify your replacement property during the 1031 exchange process and your intermediary can help you do that appropriately.

• Answering Questions. Any questions you have throughout the process can be answered by your intermediary.

Third-Party Administrator

A third-party administrator is basically just another term for a qualified intermediary. They mean essentially the same thing and can be used interchangeably. Whatever you call them – qualified intermediary or third-party administrator – it is important to work with one on your exchange.

Continued Real Estate Investment

With a 1031 exchange, you can defer your capital gains taxes on the sale of real estate and, ultimately, keep your hard-earned money working for you in a continued real estate investment. The first step is to work with a qualified intermediary who can walk you through the process, answer your questions, and advise you every step of the way. Contact our 1031 exchange intermediaries today to discuss the ins and outs of your exchange. Our office is located in downtown Minneapolis, but we work with clients across the country!

• 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.

© 2021 Copyright Jeffrey R. Peterson All Rights Reserved

How to Know if You’re in the 1031 Exchange Strike Zone

Before you conduct a 1031 exchange, you need to make sure that your property falls within the IRS strike zone for qualified property. In this article, we are going to talk about the 1031 exchange strike zone and whether your property falls within it.

Property Within the Strike Zone

The 1031 exchange strike zone is a set of criteria that govern what exactly qualifies for 1031 exchange treatment. Here are a few types of property that fall within the strike zone:

• Like-kind real estate that is held primarily for investment or business purposes.

Property Outside the Strike Zone

Here are some examples of property that exist outside the 1031 exchange strike zone:

• Real property used primarily for personal purposes – such as your primary residence or lake cabin. These are for personal use, not investment or business purposes.

• Personal property such as artwork, aircraft, and more are no longer considered eligible for 1031 exchange treatment.

• Property held primarily for resale – including flipped houses.

Defer Taxes with a 1031 Exchange

CPEC1031, LLC has been helping taxpayers defer their capital gains taxes when selling real estate for more than twenty years. Our intermediaries have the skills and experience to facilitate your exchange from start to finish. We will advise you, answer your questions, and prepare your required documents for closing. Contact our office today in downtown Minneapolis to chat with one of our intermediaries about your exchange. With a 1031 exchange, you can defer your taxes and keep that money working for you in a continued investment!

• 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.

© 2021 Copyright Jeffrey R. Peterson All Rights Reserved

Tips for Reporting Your 1031 Exchange to the IRS

Reporting your 1031 exchange to the IRS is an essential step in the exchange process. But many investors aren’t sure how to appropriately report their exchange. In this article, we are going to discuss how to properly report your 1031 exchange to the IRS.

IRS Form 8824

1031 exchanges should be reported using IRS form 8824. This form is a sort of worksheet that explains to the IRS the details of your exchange – your relinquished property, your replacement property, etc.

It is important to file this form so that the IRS is aware that you are conducting a 1031 exchange. Otherwise they may think that you still owe taxes. When you sell a piece of real estate (your relinquished property), the title company that closes the transaction is required to report the sale to the IRS on a 1099. If you fail to file form 8824 detailing your exchange, the IRS is likely to think that you have not paid your capital gains taxes on the sale.

It’s always a good idea to involve your CPA in this process, as they will know your tax situation best.

St. Paul 1031 Exchange Company

If you are considering a like-kind exchange of real property, your first step should be to consult with a qualified intermediary about your transaction. A skilled intermediary can help you wrap your head around the exchange, advise you on your best property options, and prepare all of your 1031 documents for closing. At CPEC1031, LLC, we have twenty years of experience helping clients with their 1031 exchanges. Contact us today at our downtown Minneapolis office to learn more about the exchange process and get started with your 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.

© 2021 Copyright Jeffrey R. Peterson All Rights Reserved

How Long Do You Have to Complete Your 1031 Exchange?

Timing is an important factor in any 1031 real estate exchange. In this article, we are going to talk about how much time you have to complete a typical 1031 exchange of real estate.

Standard Time Frames

The answer to the question at hand largely depends on where you are in the 1031 exchange process. Have you already sold your relinquished property? Are you still in the planning stages? These are all important questions to take into consideration.

As we have discussed before, there are some standard time frames that you need to follow when conducting a 1031 exchange of real estate. The big numbers you need to keep in the back of your mind are 180 and 45. You have a total of 180 days to complete your exchange, starting when you sell your relinquished property. If your exchange is not complete by midnight of the 180th day, your exchange will fail and you will not be able to defer your capital gains taxes. You also have the first 45 days of your exchange period in which to identify your replacement property.

You can calculate your 1031 exchange deadlines and time frames with our free online calculator.

1031 Exchange Facilitators

Section 1031 of the Internal Revenue Code is available to all US taxpayers and can significantly reduce the amount of taxes owed on the sale of real estate. If you are at all interested in the tax-deferral benefits of a like-kind exchange, contact the qualified intermediaries at CPEC1031, LLC. With over twenty years of experience, our 1031 exchange facilitators have the knowledge and experience needed to guide you through every step of your exchange. Contact us today at our office in downtown Minneapolis to set up a time to chat with our team of 1031 exchange professionals.

• 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved

Here’s What You Need to Start a 1031 Exchange

Exchanging property under section 1031 of the Internal Revenue Code can lead to significant tax deferral when done correctly. However, many taxpayers who want to do a 1031 exchange don’t know where to start. In this article, we’re going to talk about the process of getting a 1031 exchange started, and the information you need to gather before you begin the process.

Initial Information

The first thing you need to do is gather some initial information that you can send to your qualified intermediary in order to begin the process. Here’s some initial information you should get together:

• Your contact info – name, DOB, phone, etc.

• Relinquished property info – projected closing date, value / debt / equity of the property, how you hold title to the property, the original purchase price, etc.

• Replacement property into – how you plan to take title to your new replacement property, the amount / type of debt on the new replacement property, etc.

This is just the tip of the iceberg, but this information will be enough to get the ball rolling. Your qualified intermediary will work with you throughout the exchange and request additional information when needed.

1031 Exchange Property

With a 1031 exchange, you can defer your capital gains taxes when you sell a piece of real property. This can really add up and result in a significant amount of tax savings when selling real estate. But 1031 exchanges aren’t as easy as many taxpayers think. We’ve seen many taxpayers go into an exchange without the necessary preparation, only to have their exchanges fail. That’s why it’s essential to work with a qualified intermediary who can advise you, prepare your documents, and walk you through each step of the exchange process. Contact us today to speak with our 1031 exchange intermediaries about your 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.

© 2020 Copyright Jeffrey R. Peterson All Rights Reserved