| Jan 14, 2009 |
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1031 Exchange and Security of Your Funds
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Woodland Hills, CA (PRWEB) January 16, 2009 - Most investment property exchanges are a safe way to trade up while deferring taxes on capital gains. In such transactions, called 1031 exchanges, the proceeds from the original sale are held by a qualified intermediary (QI) to be used for the purchase of like investment property within 180 days. Any capital gains go into the new property and tax liability was deferred.
This was a popular process until some QIs or accommodator companies lost the monies they held in trust through investments that became non-liquid. Some accommodator companies filed for bankruptcy. Their investors, who needed the funds to purchase replacement property within the 180-day time frame, were surprised to find that the funds were not secured at all.
The 1031 exchange is still a smart move if investors know how to select a QI that can protect their funds.
Accommodator Finance Co., a leader in the 1031 industry, offers guidance with five questions an investor should ask when selecting a qualified intermediary.
1. Security of Funds:
What is the level of security the firm offers? In what type of investments will your funds be deposited? Are these accounts liquid?
2. Insurance:
Some exchange companies offer bond coverage that provides extra protection of funds. Ask the QI what kind of bonding they offer.
3. Professionalism:
Does the QI have Certified Exchange Specialists® on staff? Is the firm a member of the Federation of Exchange Accommodators?
4. Experience:
Ask the QI about their experience. Do they have a vast knowledge of the IRC 1031 codes? What is the level of their understanding and experience in the real estate industry? Is their reputation based on professionalism, integrity, accuracy and customer service?
5. Referrals:
Accommodator Finance Company's (www.accommodator.com/) mission is to provide peace of mind with all of your 1031 exchange needs. "We achieve this by offering you exceptional service, superior banking security and access to the latest concepts and developments that will help you get the most out of your 1031 Tax-Deferred Exchange," says Kevin Levine, AFC's Executive Vice President. You want to manage your assets and protect your financial strength; we want to help turn your vision into reality.
Ask the QI for bank references and client referrals. |
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