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Flawless Section 1031 Exchanges For Over 27 Years |
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SCOPE OF SERVICES 1. Preparation of documents. In order to align the proposed sale of the client's property to exchange; these are reviewed and approved by the lawyer and accountant prior to execution by the client. At that time, the Qualified Intermediary acquires the standing of an assignee of the client/seller in the matter. 2. Attendance at the closing. Our Qualified Intermediary company covers the United States, within which territory a Section 1031 exchange is permitted. As such, it is impossible for us to attend most closings personally. However, if requested and by arrangement, we would be pleased to attend any closing personally. Because overlooked details have the potential of derailing the client's intended tax benefits, this intermediary's practice is to insist on seeing and approving the relevant documents prior to passing of papers. 3. Banking and safeguarding the funds. One of the specific requirements of the statute and the regulations is that the intermediary be "Qualified", in that it has done no business (other than Section 1031 exchanges) with the client in the past 2 years and is otherwise "unrelated" to the client. It is possible for the client to find their own intermediary such as a trusted friend, but we would submit that such people are not also skilled in the practice of exchanges, meaning that their use makes for a higher likelihood of mistake. Our firm prefers to use Connecticut River Bank, NA Bank as a depository, and in all cases the funds are held under the client's name and social security number. 4. Receiving notices during the exchange. There is a critical deadline inside the time window for the client to receive replacement property and that is the 45th calendar day: it is by midnight of this day that the client must deliver to the Intermediary a list of Replacement Property choices (generally 3). The client must then settle on something on the list, with no substitutions. The remaining time period (60 to 135 days) is used to obtain financing, search titles, and close. As of July, 1989, the Replacement Property choices must be confined to the United States. 5. Delivering funds. One duty of the Qualified Intermediary is to deliver funds to the sellers of the replacement property, both for deposits and for the final settlement. Typically, unless the client wishes us to attend the second closing, the funds are wired to the Settlement Agent or Seller's attorney after our review and approval of the closing statements. 6. Conforming documents, accounting and record keeping. The Qualified Intermediary serves the function of overall supervisor of the exchange. For example many clients direct the proceeds of the first transfer into one or more properties, some or all of which are out of state. This leads to a situation with multiple parties (the property Sellers, their brokers, lawyers, possibly bankers) involved. From the client's perspective, it is important to have every step of the exchange handled by one knowledgeable intermediary. To close out the exchange, a full accounting is made. The client's complete file is retained should it ever be needed. 7. Fees and costs. The elements of expense in an exchange are the complexity of the transaction; the number of parties involved; if fractional or whole interests are to be transferred or acquired; the requirement to attend and the distance to the first closing; whether the property to be sold is currently under an agreement of sale; the number of dollars we are expected to be responsible for and for how long; the degree of haste or urgency of the situation; and other factors. Fees in this practice have ranged from $1500 to $8000 and are quoted when we know the full particulars. We try to gauge the situation on the first call and to live with the fee quoted. In one case, however, we had to revise a fee quotation when "a simple little exchange" described to us by the client developed into a transaction involving three states; two relinquished and six replacement properties; and 25 documents, 14 of which were deeds! 8. Options. It is possible to have new property constructed with the proceeds of an exchange. It's also possible to buy what you want before selling what you have (a "reverse" exchange). We specialize in transactions of this type.
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HOW MAY WE HELP? |
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WE WILL TRAIN YOU |
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| > | Court Ruling on Exchanging Second Homes | |
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Other News you can use. | |
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Edmund
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Wheeler, Inc.
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Edmund and Wheeler is actively involved |
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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 41 states. George E. Foss III and Christine S. Latulip are the firms 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. |
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