In this episode, Robert talks to Michael Brady & Alex Shandrovsky about the meaning and importance of qualified intermediary.
Robert Leonard:
Why is a qualified intermediary so important when completing a 1031 exchange? What exactly is a qualified intermediary?
Michael Brady:
Traditionally, a 1031 exchange, which has been in the tax code since the 1920s, was designed for two parties to trade properties. That is automatically a 1031 exchange for tax purposes. To trade deeds, you need a three-party structure where you can sell to one party and buy from another. To execute that, in the Treasury regulations, they created something called a qualified intermediary. For tax purposes, taxpayers use the qualified intermediary for their property, sell it, and then take the proceeds from that sale when they buy a property from another third party, and give that property to the exchanger so that they’ve been swapped with us. The tax code included the qualified intermediary concept as the middleman. We basically keep the cash from the sale out of their hands, so they’re receiving one property for another, which is a tax-deferred transaction. That’s why you actually will need us in most transactions.
It’s important to do your homework with a qualified intermediary because we’re not an accredited industry in most states. There’s no training involved. We’re not qualified in the sense that we have no education training nor any kind of requirements. I happen to be a certified exchange specialist, which is a designation that’s given out by our trade association federation of exchange accommodators. That just shows that I have some proficiency in 1031 exchanges, and I passed a qualifying test. But by and large, you do not have to have that to be a qualified intermediary. So, it makes sense to do your homework. A good qualified intermediary will lead you to your process, help you defer those taxes, and get you safely from one property to the other without Uncle Sam reaching into your back pocket.
Subscribe to Real Estate 101 podcast show: [ Ссылка ]
To access our show notes, courses or forums, go to [ Ссылка ]
⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤
ADDITIONAL INVESTING RESOURCES:
Intrinsic Value Assessments: [ Ссылка ]-
Real Estate Investing Explained: [ Ссылка ]
We Study Billionaires: [ Ссылка ]
Bitcoin Fundamentals: [ Ссылка ]
Millennial Investing: [ Ссылка ]
Real Estate 101: [ Ссылка ]
Asset Allocation Course: [ Ссылка ]
⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤
Download Stig & Preston's 1-page checklist for finding great stock picks: [ Ссылка ]
Have a question? Get your voice heard on the show: [ Ссылка ]
⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤ ⏤
DISCLAIMER: This show is for entertainment purposes only. Before making any decisions consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.
