1031 exchange QIs
The 1031 Exchange Connection
1031 Exchange Connection, Inc. is a qualified intermediary that facilitates 1031 exchanges for real estate investors deferring capital gains tax on the sale of investment property. It works with clients in Florida and across the United States, and also handles FIRPTA withholding and ITIN matters for foreign sellers.
An exchange can be started online or after a free consultation. During the exchange the firm holds all funds in separate, non-commingling accounts and walks the client through each step of the transaction. Deferred, reverse, and construction exchanges are all handled, with oversight of the reverse, construction, and complex structures handled by a dedicated part of the team.
The firm states it has more than 20 years of experience as a qualified intermediary and that its team includes a licensed CPA with an extensive background in real estate tax strategies. It publishes both its professional liability insurance certificate and its crime and fidelity bond insurance certificate on the site, which is unusual for a QI.
Fees are not published. The site also gives two locations - a Delray Beach mailing address in the footer and offices described as being in Bonita Springs - so the servicing office is worth confirming.
Best for
Florida investors and foreign sellers who want a qualified intermediary that publishes its bond and liability certificates and keeps exchange funds in separate, non-commingled accounts. It is not a source of published fee schedules.
What they do
- Deferred (forward) 1031 exchanges
- Reverse 1031 exchanges
- Construction and improvement exchanges
- FIRPTA withholding guidance for foreign sellers
- ITIN application assistance for foreign investors
- Real estate tax consulting
- Online exchange setup
- 1031 exchange presentations for agents, title and closing agents, attorneys, and CPAs
Details
| Attribute | Value |
|---|---|
| Other offices | Bonita Springs, FL |
| Exchange types | Forward, Reverse, Improvement |
| Fund security | Fidelity bond, E&O |
What stands out
- States more than 20 years of experience facilitating 1031 exchanges.
- Publishes its professional liability insurance certificate and its crime and fidelity bond insurance certificate on the site.
- Holds exchange funds in separate, non-commingling accounts during the exchange.
- The team includes a licensed CPA with a background in real estate tax law.
Common questions
- What counts as like-kind property?
- The IRS defines like-kind property as being of the same nature, character, or class, which refers to the use of the property rather than its quality. Both properties must be investment or trade-or-business property, not a personal residence, and the zoning need not match. Property claimed as personal use or bought to flip does not qualify, and the firm suggests holding an investment property at least a year and a day before exchanging.
- How much time is there to complete an exchange?
- Forty-five days from the closing date of the relinquished property to identify replacement property, and 180 days to close on it. One day past either limit voids the exchange, and preparation begins before the relinquished property closes.
- Are 1031 exchanges tax free?
- No. A 1031 exchange is tax deferred, not tax free. The deferred tax becomes due if the replacement property is later sold without reinvesting through another exchange. There is no limit on how many times a property can be exchanged, so the deferral can be rolled forward repeatedly.
- What is a qualified intermediary?
- A qualified intermediary facilitates the exchange process. Under IRS guidelines the QI must hold the cash proceeds from the sale of the old property and prepare the legal documents for the exchange, then forward those proceeds to the closing agent for the replacement property.