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It is crucial for the success of any exchange that the Qualified Intermediary (QI) makes sure it is documented correctly. The closing attorney or escrow officer must read and follow the §1031 exchange instructions provided by the QI.
“ I found that your instructions were very complete and easy to follow, and enabled the escrow to close smoothly. Thank you for all your efforts. ”
The IRS requires a Qualified Intermediary to facilitate a §1031 exchange under the safe harbor guidelines. The Intermediary must prepare and send exchange instructions to the closing. Real estate investors need an experienced Intermediary to provide accurate and complete information and documentation, including a thorough review of closing statements and exchange instructions. There is only one chance to do things right. Starker Services can give you the peace of mind available only with the personal and experienced attention we've provided for over 20 years.
“ You are doing a great job to simplify a tax-free exchange transaction for the Title Company. I appreciate you getting the papers to me in advance so that I had time to get any of my questions answered early. ”
Starker Services can handle your client's §1031 exchange and provide you, the closer, with free consultation from the country's oldest and most experienced independently-owned Qualified Intermediary.
Call us today at (800) 332-1031 to speak to one of our experts and find out just how easy a §1031 exchange can be. We have worked with tens of thousands of closers through the exchange process easily and effectively.
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The true power of exchanging is the ability to meet investment objectives without losing equity to taxation. Known as leveraging, this method of acquiring real estate helps your clients purchase property many times the value of their initial investment. Simply put, a §1031 exchange allows your clients to sell their investment property while deferring capital gains taxes by reinvesting 100% of their equity into another property of equal or greater value.
Starker Services maintains that Attorneys and Closing Professionals play a key role when they point out potential benefits of tax-deferred exchanges to their clients. Keep in mind that sellers can employ the services of an Exchange Intermediary at any point until the contract closes - after that it is too late.
The main requirement is that your client's property or business asset has been held by the seller for productive use in a trade or business, or for investment purposes, and will be exchanged for like-kind replacement property.
Your client’s should never have to pay income taxes on the sale of property if the plan is to reinvest.
Every dollar saved in taxes allows an investor to purchase 4-5 times as much real estate.
Your client’s should be aware of the time requirements of 45 days to identify the replacement property and 180 days to complete the entire exchange.
Exchanges can range anywhere from a simultaneous exchange of two properties to complex, multi-party transactions involving construction and/or reverse exchanges. Consult a Qualified Intermediary like Starker Services, Inc. to find out what type of exchange is best for your client.
Clients are able to maximize their capital by deferring the taxes that would otherwise be incurred on an outright sale of their property by utilizing an exchange. They can use the entire amount of the equity from the exchange to acquire substantially more replacement property.
Properly structured and administered, an exchange becomes an invaluable tax saving tool and an integral part of the investor’s strategy.
Clients considering the sale of investment or income property should first consult their financial or tax advisor to determine if a tax-deferred exchange will benefit their long-term investment goals and retirement plans. Ultimately, your client must decide whether to take advantage of an IRC Section 1031 exchange or write a check to the IRS.
This material is provided for informational purposes only and is not to be construed as tax advice. The reader is strongly advised to speak with a tax consultant before attempting to employ any of the concepts stated herein.