By itself, a sale followed by a purchase will not qualify as a 1031 Exchange. Instead, the transaction must be treated as an exchange for tax purposes. To convert a sale followed by a purchase into an exchange, a property owner must employ the services of Qualified Intermediary (QI) who acts a middleman to tie the sale to a buyer and the purchase from a seller as a verified exchange. It’s very important that you select a QI and contact them prior to the closing of your sale.

What else does a QI do for you?

-With our title, closing and exchange services, Charter Title can handle your closings while CHF Exchange can handle your exchange creating a smooth and efficient transaction with all information being stored and exchanged in house

-Provide free consultations regarding your real estate transactions and how it will fit into a 1031 Exchange

-Work hand in hand with your attorney, tax-advisor or real estate professional to ensure your 1031 Exchange is executed properly

-Coordinate your 1031 Exchange closings with the escrow closer of your choice and provide necessary exchange documentation as needed

 

-Instruct the escrow closer on how to prepare your closing documentation and what to do with your exchange proceeds

 

-Hold your exchange proceeds in between the closing of your sale and the closing of your purchase (we have interest bearing accounts – please ask!)

 

-Provide an instruction letter with your timeline with appropriate forms and instructions to identify your replacement property

 

-Instruct the escrow company on how to prepare your closing documentation and request your exchange proceeds as well as provide the necessary documentation needed

 

-Release your exchange proceeds, on your behalf, to the escrow officer to complete the 1031 Exchange transaction

-Keep your file on hand for any questions that might arise from your accountant next year