The Five Professionals to Have on Your 1031 Dream Team
March Madness is almost here. In the 1031 game, if you or your
clients are considering a tax deferred exchange, what kind of “Dream
Team” will you need to make it through the Final Four and on to the
national championship? There are five professionals that are needed:
- 1031 Qualified
Intermediary. This is your point guard and your key position.
Choose a reputable, well-known
qualified Intermediary (QI) to strategically position and drive your
1031 game forward. Your QI is strategic, knows the 1031 game inside and
out, including what’s happening around you with the other players –
i.e. recent rulings that may affect your situation and will alert you
to any missteps that might damage the integrity of a successful 1031
Exchange. Your QI prepares and manages the pertinent documents to
comply with safe harbor regulations, coordinates with your team,
proactively looks for the best play, and expertly sees you through the
end of your exchange.
- An agent/broker who
understands 1031 Exchanges. This is your guard. You want to have
the best and the most experienced residential or commercial real estate
agent/broker involved. Your agent/broker needs to be familiar and
comfortable with 1031 Exchanges. Your agent/broker must be on top of
his/her game such as putting a cooperation clause in the listing
agreement and in the purchase agreement that gives notice to all
parties that the taxpayer is doing an exchange. Inexperience here may
lead to a quick single game elimination.
- An experienced attorney.
A lawyer is your forward that will give you points and legal advice on
any gray areas in your transaction. While your Qualified Intermediary
can tell you about the 1031 tax code, QIs cannot offer specific legal
advice. Your attorney is a critical player especially with complex
transactions. You want your forward scoring for you here and big in the
- A CPA. Here’s your
other forward. It is important that you choose a CPA who understands
tax deferred exchanges. You will want to involve your CPA early in the
planning stages of your sale, and then keep passing the CPA your
information as you progress through your game. That way, when it comes
time to report the exchange on your tax return, your CPA is familiar
with the transaction. No fouls wanted here. Only net.
- A closing agent. A
competent, certified closing agent is your scoring center. Depending on
where you are selling, that might be an attorney or an escrow/title
officer. Disbursement of funds and proper closing statement
documentation are just a few of the main concerns with a 1031 Exchange.
You do not want any accidental disbursements of monies or problems with
closing within your deadline. Choose someone who can slam dunk.
IPX1031® - Rounding Out Your Team
As the nationwide leader in tax deferred exchanges, IPX1031®
is here to offer you the best in service, experience and security. When
you choose IPX1031® as your Qualified Intermediary, you can
confident that your exchange will be handled expertly and that your
funds will be safe, secure, and available when needed. IPX1031®
to help our clients and their advisors keep current on tax and industry
issues pertaining to 1031 Exchanges. For more information about us,
additional resources, or our complimentary monthly webinars, visit our
website at www.ipx1031.com.