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WHAT IS A QUALIFIED INTERMEDIARY?
One of the reasons the
Internal Revenue Service may disallow 1031 tax-deferred
treatment for a transaction and re-characterize it as a taxable
sale (and subsequently assess a capital gains tax) is by taking
the position that the Exchangor received or could have received
the sale proceeds from the disposition of the
Relinquished Property, i.e., constructive receipt and/or actual receipt.
The Treasury Regulations specifically allow for the use of a
Qualified Intermediary, also known as an Accommodator. The
Qualified Intermediary substitutes for or on behalf of the
Exchangor as the seller or buyer, depending on which side of the
transaction you are on, and holds the net sales proceeds from the
sale of the Relinquished Property in a segregated Qualified
Escrow Account until the Replacement Property transaction is
ready to close. The Treasury Regulations contain certain safe
harbor provisions that avoid the constructive or actual receipt
issues when the Exchangor has retained and used a Qualified
Intermediary.
The Qualified Intermediary must be an independent entity who is
not the Exchangor, an agent of the Exchangor, or a related party
of the Exchangor and who enters into a written “Like Kind
Exchange Agreement”, Qualified Escrow Account Agreement and the
Assignment, Acceptance, Notice and Direction to Convey
documents. These 1031 tax-deferred, like-kind exchange
agreements limit and restrict the Exchangor's rights to the
exchange funds from the sale of the Relinquished Property. It
directs the Qualified Intermediary to acquire the Relinquished
Property from the Exchangor, transfer it to the buyer, acquire
the Replacement Property from its seller and transfer it to the Exchangor.
Click
here To learn about our Scope of Services as a Qualified
Intermediary |
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HOW MAY WE HELP? |
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What IS/IS NOT a Section 1031
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Real-life examples of successful Exchanges. |
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What qualifies for an Exchange? |
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Review Exchange case studies. |
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QINEWS |
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Court Ruling on
Exchanging Second Homes |
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Edmund
&
Wheeler, Inc.
QI
567 Cottage
Street
Littleton, NH 03561
603.444.0020
603.444.6611 Fax
exchange@section1031.com |
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Edmund and Wheeler is actively involved
in the exchange community. |
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Edmund & Wheeler, Inc.
headquartered in Littleton, New Hampshire (NH) is a Section 1031
Qualified Intermediary with over 27 years of experience. Edmund & Wheeler
has completed thousands of successful exchanges in 47 states.
George E. Foss III and Christine S. Latulip are the firm's principals
bringing with them decades of experience in finance, tax issues,
banking, real estate and most importantly are proven experts in all
things Section 1031. This site contains real-life examples of successful
exchanges, industry insight, detailed case
studies of exchanges, Section 1031 news and other related materials. |
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Copyright 1995-2008.
Edmund & Wheeler, Inc. all rights
reserved.
Banner Images Copyright
2005-2008.
Peter Mogran and Mary O'Toole, all rights
reserved.
The information contained on this site is for
informational purposes only and does not
constitute tax, legal or accounting advice. |
