Aronoff Rosen & Hunt’s affiliate, Tri-State Land Title Qualified Intermediary, LLC, is available to facilitate 1031 exchanges.
Under Section 1031 of the Internal Revenue Code (26 U.S.C. § 1031), the exchange of certain types of property may defer the recognition of capital gains or losses due upon sale, and hence defer any capital gains taxes otherwise due.
The role of a QI is similar to, but not identical to, the role of an escrow company. A QI is essential to completing a successful and valid delayed exchange. Anyone who is related to the taxpayer, or who has had a financial relationship with them within the two years prior to the close of escrow of the exchange cannot be used as the QI.
This means taxpayers cannot use their current attorney, certified public accountant or real estate agent. A corporation or other entity owned by your CPA, CPA firm, real estate agent or attorney is likewise disqualified to act as Qualified Intermediary.
Our affiliate can provide the following services:
- Coordinate with the exchangers and their advisors, to structure a successful exchange
- Prepare the documentation for the Relinquished Property and the Replacement Property
- Furnish escrow with instructions and documents to effect the exchange
- Secure the funds in an insured bank account until the exchange is complete
- Provide documents to transfer Replacement Property to the exchanger, and disburse exchange proceeds to escrow
- Hold the document of Identification of Replacement Properties sent by the Taxpayer
- Submit a full accounting of the Exchange Funds for the Taxpayers Records
- Submit a 1099 to the Taxpayer and the IRS for any growth proceeds paid
Due to income tax regulations, we refer our clients to other qualified intermediaries, while we obtain referrals from other attorneys or firms who are not able to handle the escrows of their clients.