We are a professional Qualified Intermediary (QI). Helping clients with 1031 exchanges of real property is all we do. The IRS clearly defines our role as the Qualified Intermediary in a tax-deferred exchange. We freely consult on the feasibility of a 1031 exchange. Provide proper documentation that meets the IRS regulation. Follow the IRS rules to ensure there are no violations of the constructive receipt rules for not having access to the funds during the exchange. Manage the exchange timing, providing consistent reminders and follow up. Actively participate in the replacement property purchase process, making sure to keep within the IRS regulation.
A tax-deferred exchange is giving up real property currently held for business or investment and subsequently exchanging for replacement property also to be held for business or investment use.
A deferred or delayed exchange is sometimes called a forward exchange. The exchanger is giving up/relinquishing property and exchanging forward and receiving the replacement property(ies).
Treasury Regulations under Section 1.1031
The 1991 Treasury Regulations under Section 1.1031 provide detailed guidance on how to structure a tax-deferred exchange, and defines a qualified intermediary safe harbor to act as an intermediary between relinquishing property and receiving replacement property. Realty Exchange Corporation is a qualified intermediary.
Qualified Intermediary Safe Harbor
Using the qualified intermediary safe harbor in a tax-deferred exchange requires an exchange agreement with a qualified intermediary. We create the Exchange Agreement.
To qualify for tax-deferral, the transaction must be structured as an exchange of properties, as distinguished from a transfer of property for money followed by a re-investment in replacement property.