1031 ACCIDENTAL MISTAKE

For years Qualified Intermediaries (QIs), like ourselves, have been concerned that an accidental mistake could derail a good 1031 exchange. Like a settlement agent sending the proceeds from a settlement directly to the seller, when the instructions from the QI clearly told the settlement agent to send the funds to the Qualified Escrow Account at a bank.

While the main thrust of the case addressed another issue, in the case Morton v. United States, of April 27, 2011, in the Court of Federal Claims, the judge made a common sense ruling that accidental 1031 exchange mistakes that are quickly corrected do not void a 1031 exchange.

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