The Qualified Intermediary (QI) holds all the proceeds
during 1031 exchange. The intermediary basically acts as a limited purpose
depository institution during the exchange. There is no state or federal
regulations on intermediaries in the US, except in states like California,
Idaho, Nevada, Arizona, and Colorado.
The role of an intermediary is to create agreements needed
to structure a 1031 exchange. It also makes sure exchange complies with the
rules of Internal Revenue Service (IRS).
Intermediaries offer multiple services and possess various
skills, training, and competence. The intermediaries are tax accountants, bank
affiliates, attorneys, realtors, or title company affiliates. There are some
intermediaries that don’t have any training as an exchange professional or a
tax professional. Intermediaries charge some fees for their services or retain
interest (complete or a portion) received on the funds. Some intermediaries
charge through both of these ways.
While for an intermediary, make sure he or she has a right
amount of experience, along with a verifiable reputation. Select an
intermediary who is ready to advise you on exchange strategies and issues of
exchange documents.
If you have trouble finding QI for exchange, you can take
our help. We, at FAI Exchange, will help you find QI who is trusted and capable
of giving the right advice.
The company has also helped the investors from Massachusetts
in 1031 real estate exchange by offering DST investment options.
To know more 1031 exchange properties offered by the company,
check this link.
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