Why the Role of a Qualified Intermediary (QI) is Critical | Don't Touch the Money скачать в хорошем качестве

Why the Role of a Qualified Intermediary (QI) is Critical | Don't Touch the Money

Contact us to ensure that your 1031 Exchange planning is complete and you're ready to implement prior to the closing of your property sale. We can be found at www.the1031investor.com. CONNECT with us Website: https://www.the1031investor.com/ LinkedIn:   / the-1031-investor   Facebook:   / the1031investor   Twitter:   / davefoster1031   BiggerPockets: https://www.biggerpockets.com/users/d... ABOUT The 1031 Investor, Dave Foster Dave is a degreed accountant and serial real estate investor who is a qualified intermediary and consultant for tax saving strategies such as the 1031 exchange and the section 121 homestead exemption. Dave breaks down exactly how to use the 1031 exchange in layman’s terms. #1031exchange #1031exchangexplained #whatis1031exchange #the1031investor #davefoster ===== TRANSCRIPT Now, after the closing of the sale, your proceeds are going to go into your exchange account with your qualified intermediary. Then you're going to go find your property – remember: 45 days, 180 days. When you find that property and you get it under contract, guess what? You're going to assign your contract rights to purchase it to the QI. Then there's going to be a notice at the closing table that the 1031 Exchange has happened. Your proceeds come in from the exchange account. But, the curious thing is that although there's a lot of assignment going on, the QI never, should never, take title to the real estate. It should always be directly deeded from you the seller to the buyer or from the seller to you the buyer to complete your 1031 Exchange. The QI is the assignee only on the settlement statement. But the question that is asked at the end of the deal, did you sell a piece property? (I see the camera nodding up and down.) No, you didn’t. Wait! What? Did you buy a piece of property? Well, yea, because . . . no you didn't! What you did was you exchanged properties with your qualified intermediary. And that's what the second District Court of Appeals calls - actually - the “legal fiction” of a 1031 Exchange. And that's why the role of the QI is so critical. That third party must be in there to be the person you are changing with. And, remember, those documents must be in place for the first time prior to the closing of the sale. Now remember I mentioned that your funds go into the exchange account with the QI. Pretty big deal right? Because this is an unrelated third party. So, the QI is going to have to keep your funds secure. They're going to have to have levels of bonding and insurance. They're going to keep your money safe, because that's your money not theirs. So, the IRS says that you cannot have either actual receipt, which means, you get the cheque. The IRS also says though, that you cannot have constructive receipt. Constructive receipt is where you would say to your title company, “Just keep the proceeds, I'm going to do a 1031 Exchange.” That will not work. Because anytime you ask, the title company would give you that money. That's constructive receipt. You control it, even if you're not actually touching it. And the IRS says that both actual and constructive receipt destroy your exchange. Just like that person who says, “Dave, I closed on my property yesterday. I’ve got the cheque right here. I’m ready to go.” No, you’re not. When you touched that cheque, you lost your opportunity to do the 1031 Exchange. So, advance planning really important. The last thing the QI is going to do is consult. Obviously, we've seen it just this short amount of time - it's a pretty deep statute with a lot of applications and a lot of pitfalls.