How a Qualified Intermediary Facilitates a 1031 Exchange

To effect a successful 1031 tax-deferred exchange, many sellers engage the services of a qualified intermediary.

Doing a 1031 exchange is not as difficult as it used to be many years ago. Today, it's handled in the same way a regular sale and a purchase is transacted. The seller puts the property on the market, attracts an offer, negotiates the offer and signs a purchase offer. Then the seller finds another property to buy.

The beauty of a 1031 exchange allows the seller to defer capital gains and pay no taxes.

Regulations say a seller must identify the new purchase within 45 days from closing the existing property, and the seller (now buyer) has 180 days to close the transaction. The qualified intermediary helps the seller conform to IRS guidelines to effect a 1031 exchange by stepping in before the first property closes and taking control of the proceeds . . . read more about Qualified Intermediary.

More Articles by Elizabeth Weintraub:

• How to Do a 1031 Exchange
  
• Tenants in Common 1031 Exchanges
  
• How to Buy, Fix-Up and Sell a Home

_{©Big Stock Photo}

Technorati tag: qualified intermediary