When searching for a qualified intermediary, many people first think of their CPA or accountant, but that’s a common mistake. In this article, we are going to discuss why your accountant (or any other related party) can’t act as your 1031 qualified intermediary.
1031 Exchanges & Related Parties
When most people hear the word “related party” they assume it means family members, and it makes sense that a direct relative wouldn’t be able to act as your neutral third-party intermediary for your exchange. But when it comes to 1031 exchanges, “related party” applies to more than just blood relatives.
In short, a qualified intermediary needs to be a neutral third party operator, completely unbeholden to the taxpayer conducting the 1031 exchange.
The following is a list of related parties that would be barred from acting as a qualified intermediary on your behalf:
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Your CPA or accountant, lawyer, real estate agent, or anyone else who has provided you with professional services in the past two year period.
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Your employee.
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Your blood relatives.
It’s always a good idea to work with a qualified intermediary that is completely neutral.
Qualified Intermediaries with Decades of Experience
If you’re considering a 1031 exchange of your investment or business real estate, speak with a qualified intermediary at CPEC1031, LLC. With decades of experience, our intermediaries are well-equipped to help you through the entire like-kind exchange process. Whether you’re doing a forward exchange, reverse exchange, or build-to-suit exchange, we can help you save money in capital gains taxes. Reach out to our team at our Minneapolis office today to learn more about the 1031 exchange process and how we can help you with your next like-kind exchange!
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Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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