Qualified-Intermediary Services

   1031 Solutions, Inc. provides Qualified Intermediary Facilitation Services. Utilize our 1031 exchange and real estate transaction expertise to assure the lawful suspension of your tax obligations and to increase investment leverage of real estate equity & tax savings.

We facilitate the opportunity for exchangers to build their real investment portfolios with the immediate use of their tax savings in a reinvestment   

Tax Deferred Exchange Requirements

   In a delayed exchange under Section 1031, the property currently owned is called the "relinquished" property and must be exchanged for like-kind "replacement" property.

      REQUIREMENT ONE: Properties must be held for investment or used in a business. The IRS uses the term "like-kind" to describe the type of properties that qualify. This definition covers a vast variety of developed and undeveloped real estate. Properties which are clearly not like-kind are "held for sale." The relinquished and replacement properties need not have identical functions (i.e. both be apartment complexes or commercial strip centers).

      REQUIREMENT TWO: The IRS requires an investor to identify the replacement property(s) within 45 days from closing on the sale of a relinquished property. The 45 Day Identification Period begins on the closing date, and the replacement property(s) must be properly identified in a letter signed by the Exchanger and received by the Qualified Intermediary 180 days between the sale of the relinquished property and the purchase of the replacement property.   

1031 Delayed Exchange

   This is the most universal exchange, safely providing exchangers with the flexibility of replacement property or properties.
 

From the outside, a delayed exchange resembles a taxable real estate sale except that prior to closing on the property being sold, a set of legal documentation procedures are initiated between a Qualified Intermediary, the buyer, and the Exchanger. All parties to the exchange must fully comply with the requirements of the code or the exchange will fail.
 

The beginning of the exchange occurs wwith the closing of the first relinquished property. The exchanger then must identify his designated replacement property with 45 days, and must close on "like-kind" replacement property. Prior to the replacement property closing, the exchanger, the seller, and the Qualified Intermediary execute an Assignment Agreement transferring to the Qualified Intermediary the rights to purchase the replacement property. The exchange is completed when the Qualified Intermediary uses the exchange proceeds to purchase the replacement property and trades it back to the exchanger.   

Delayed Exchange Deadlines

   You must identify the property/properties to be received within 45 days after the date you transfer the property given up in the exchange (the "relinquished" property). If you transfer more than one property (as part of the same transaction) and the properties are transferred on different dates, the identification period and the receipt period begin on the date of the earliest transfer.

      Although Exchangers can identify more than one replacement property, the maximum number of properties that can be identified is limited to:

Three properties without regard to their fair market value ("3 Property Rule") Any number of properties so long as their aggregate fair market value does not exceed 200% of the aggregate fair market value of all relinquished properties ("200% Rule")

Any number of properties without regard to the combined fair market value, as long the properties acquired amount to at least ninety five percent of the fair market value of all identified properties ("95% Exception")