I'm currently thinking of doing a 1031 exchange on one of my investment properties and I was wondering if the escrow company closing my transaction is able to act as my qualifying intermediary or if I have to hire an outside company that specializes in 1031 exchanges. If so what do I need to provide to my escrow company??
2007-07-25 05:15:08 · 4 answers · asked by KD 1 in Business & Finance ➔ Renting & Real Estate
Check out the website http://www.apiexchange.com and it can give you all the information you need to know about 1031 Tax Deferred Exchanges. 1031's are great for investors who want to keep investing their money because you aren't taxed on what you put back in to investments. I have investors that I work with who take advantage of this opportunity and it's all legally set up by the IRS. There are some very specific guidelines as well so be sure you consult a financial adviser and/or a tax attorney and do your homework first so you stick to the guidelines put in place by the IRS. I don't want you to get into trouble so please talk to the appropriate professionals before you act. The escrow company is knowledgeable on this issue but they can't "legally" advise you on it. You can also email them info@apiexchange.com.
2007-07-25 05:36:51 · answer #1 · answered by Niksmom 2 · 0⤊ 0⤋
In my market (Wisconsin) title firms regularly act as escrow agents (they also do closings) for 1031 exchanges. From what I can determine, the qualifying criterion is that you NEVER take direct possession of the proceeds funds from the sale of the first property. They must be held by a qualified intermediary and directly applied to the next purchase.
Nonetheless, you are advised to seek counsel to insure that you comply with all regulations concerning your 1031 exchange.
2007-07-25 05:50:33 · answer #2 · answered by acermill 7 · 0⤊ 0⤋
You need an expert in that field, although extremely lucrative in deferring taxes it has to be followed by the letter and each deal stands on it's own merits, or they will tax you anyway. You can also go look here
Property Exchanges 1031, 1033, 1034, 721 & 121
a simple explanation (private site)
http://www.transunionexchange.com/overview_section_1031_1033_1034_721_121_of_internal_revenue_code.asp
Best of luck to you
2007-07-25 05:54:17 · answer #3 · answered by newmexicorealestateforms 6 · 0⤊ 0⤋
get with a outside company that specializes in 1031 exchanges its a complicated transaction so let someone that specializes in that field handle it...good luck
2007-07-25 05:43:24 · answer #4 · answered by WeLoan.Us 2 · 0⤊ 0⤋