If two parties are doing a simultaneous 1031 exchange, you don’t technically need to use a qualified intermediary. However, it’s often still a prudent practice to use a qualified intermediary in a simultaneous exchange because that’s how the IRS has become accustomed to seeing these exchanges reported. Additionally, the qualified intermediary structure provides a certain formality and uniformity to the process.
This is perhaps even more important when there are differences between the two parcels being sold. If the values being swapped are not identical, that means one party is going to need to be made whole by adding cash to the transfer. Another factor is that if one property has debt on it and the other doesn’t, that debt has to be extinguished in order to convey marketable title. Using a qualified intermediary helps soften the rough edges of the transaction and provides a uniform way of dealing with any discrepancies in value, equity, and debt.
Defer the Tax and Maximize Your Gain with a 1031 Exchange
A like-kind exchange under section 1031 of the Internal Revenue Code allows you to defer your capital gains taxes and maximize your gain when selling qualifying real property. At CPEC1031, LLC we have decades of experience in the 1031 exchange industry and have performed countless exchanges of all shapes and sizes, from forward exchanges, to reverse exchanges, to build-to-suit construction exchanges. Reach out to our team of 1031 exchange professionals today at our Twin Cities office to get started with 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.
© 2025 Copyright Jeffrey R. Peterson All Rights Reserved