When you are looking to complete a 1031 Exchange, it is important that you work with a Qualified Intermediary. This individual is responsible for ensuring that the exchange goes smoothly and according to plan. They will act as the go-between for the buyer and seller and make sure that everyone follows the rules of a 1031 Exchange. Without a Qualified Intermediary, it would be very difficult to complete an exchange successfully.
A qualified intermediary is defined as a person who is not the taxpayer or a disqualified individual that enters into an agreement with the taxpayer (the "exchange agreement") and, as required by the exchange agreement, acquires the relinquished property from the taxpayer, transfers the relinquished property, acquires the replacement property, and transmits it to the taxpayer.
Intermediaries do not need to be licensed. However, qualified intermediaries cannot have a financial interest in the outcome of the exchange. Overall, the intermediary will provide several key services:
- Create and execute the agreement limiting the taxpayer's rights to receive, pledge, or borrow funds or property held by the intermediary.
- The Qualified Intermediary must acquire the relinquished property from the taxpayer and transfer it to the buyer.
- The Qualified Intermediary must hold the sale proceeds and use them to acquire the replacement property.
- The Qualified Intermediary must identify potential replacement properties for the taxpayer.
- The Qualified Intermediary must facilitate the purchase of the replacement property.
If you are considering a 1031 or “Like-Kind” Exchange, it's important to work with a Qualified Intermediary to ensure the success of your transaction. At Brazos 1031 Exchange, we are here to provide you with the guidance and assistance you need to complete your exchange successfully. We are available to serve clients located anywhere throughout the United States. To schedule a complimentary consultation, simply call our office at (888) 508-1901.