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Updated December 18, 2024
A 1031 Exchange is a transaction in which a taxpayer can sell one property and buy another without a tax consequence. Although the basic steps of a 1031 Exchange are simple, the overall process can be complex due to the various factors involved.
Section 1031 of the IRS tax code allows a taxpayer to take up to 100% of the sale proceeds from the sale of any investment property and purchase another investment property while deferring the tax on the capital gains reinvested.
Also known as an Accommodator or a Facilitator; the Qualified Intermediary (QI) is the Intermediary who receives the sale proceeds upon close-of-escrow (COE) of each sold property.
The Escrow/Title company closes escrow and sends the funds directly to the QI to hold during the 45-day identification period.
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