An Experienced Exchanger's Checklist

Absolutely, investment 5-10 minutes on a Zoom video confernece at your convenience. One of our experts can answer all your questions and ensure that you are getting started on the right foot. Click here to schedule a meeting at the time of your choice.

Unfortunately, we all live in a dangerous digital world where some of our most precious personal data or transactional logistics can be hacked and compromised. We were recently reminded of how critical this is when the two largest title company owned Intermediaries were hit with a ransomware attack and shut down for short periods. Bottom line, the 1031 exchange industry is largely unregulated. It is up to you to ensure that your Qualified Intermediary treats both your data as well as your exchange proceeds properly.

We go into detail elsewhere about our commitment to the safety of your hard-earned 1031 proceeds and the three things we do which will ensure the safety of your deposit. But here they are in brief: One, we will set up your exchange trust account in your name and with your tax identification number. In addition, within our Exchanger Portal you'll have complete 24/7 visibility into yout trust account and all the activity of your ins and outs. And lastly, you as the Exchanger will be required to provide written authorization for any transfer out of your trust account. Also, if you'd prefer to pay extra for a Qualified Escrow Account where a bank officer approves any transfer as well as you, our bank can provide that service for an addititonal $500.

It can through what is known as a reverse exchange. However, because the IRS will not allow you to exchange into property you already own, you'll never be able to buy the replacement proeprty, then sell your old relinquished property and call it a backwards exchange. The IRS has however, set forth a Revenue Procedure (2000-37) that stipulates the correct processs to accomplish a successful reverse exchange. They can be extremely effective, depending upon your circumstances. But, make sure you understand that they are more complicated, and therefore much more expensive than a regular forward exchange.

Yes, you may improve a replacement property with what is known as an improvement exchange, or you can build an entirely new replacement property with a construction exchange. In fact, there are provisions where certain construction exchanges can be set up to exceed the typical 180 day window and possiblly extend out to two years.

As you know, by law, DSTs can have up to five hundred beneficial owners. So, when a DST reaches the end of its life cycle and needs to be sold, you, as a partial owner of the underlying property will need to either exchange into another property or advise the Closer or Escrow Holder that you intend to take your sale proceeds and report a taxable event. If you'd like to exchange, we'd be happy to assist you. Just drop us a line and we'll immediately set out to get your sale data and send you your exchanges docs for e-signature within a few minutes.

Since DST interests are considered securities, they can only be purchased through a licensed Broker-Dealer or Registered Investment Advisor. We work with these people every day. If you don't know one and need a referral, we'd be plesaed to provide you with a few names of proven investment professionals who can assist you in locating and securing the ideal DST or alternative investment property interest.