Fact to know about Qualified Intermediary

If the investor is planning to invest through 1031 exchange, and want to reinvest the property for the profit of tax deferment, you can get associated with us i.e., qualifiedintermediary.com. Here we have a team of experts also known as Qualified Intermediary to help you to complete your 1031 exchange in an ideal way. All in all, before executing for 1031 exchange, the taxpayer or investor must have brief learning of the 1031 exchange and What is qualified intermediary?

As 1031 exchange is a process that takes place between two parties; however, a Qualified Intermediary has equal importance. A Qualified Intermediary is a real estate firm that helps investors or the taxpayer in completing 1031 exchanges. In a 1031 exchange process, a Qualified Intermediary is named as the principal, which means that he is the person who is responsible for selling and buying properties on behalf of the investors. Therefore, it is compulsory to involve a Qualified Intermediary in 1031 exchanges.

It is also very important to watch that at what time during a 1031 exchange a Qualified Intermediary is involved. It’s always advised that an investor must involve a Qualified Intermediary at the beginning of a 1031 exchange. In fact, an investor or the taxpayer is required to enter a 1031 exchange agreement along with a Qualified Intermediary. So, what actually a Qualified Intermediary does?

Duties of a Qualified Intermediary:

· A special document is signed by the qualified intermediary when he enters into a 1031 exchange agreement with a taxpayer. Under this agreement, the qualified intermediary is named as the ‘seller’ of the relinquished property.

· The Qualified Intermediary holds the returns of the relinquished property and not the investor or the taxpayer. An exchange will promptly disqualify if the taxpayer touches the proceeds of the relinquished property or invests it somewhere.

· After this, the proceeds are reinvested by the qualified intermediary to buy a new replacement property. On last day a special document is signed by the Qualified Intermediary in which he is named as the ‘buyer’ of the replacement property.

· Once an exchange is finished, the Qualified Intermediary transfers the title to the property to the taxpayer or investor without any constructive receipt of the funds obtained from the sale of the relinquished property and the sum spent on the replacement property.

In real estate business, experience is the most important thing. So, the first thing an investor should look in what is Qualified Intermediary roles and experienced in 1031 exchanges because 1031 exchange are complex, and a growing firm may find it hard to complete the exchange smoothly. These are characteristics of a good Qualified Intermediary. The difficult part is to search an experienced Qualified Intermediary within a very less time. As there are many options available in the market for the investors, finding a potential Qualified Intermediary is never a easy task for the taxpayer unless he is familiar with one. Taxpayers, who’re committing to a 1031 exchange for the first time, may need to invest more time in finding a suitable Qualified Intermediary.