1031 Exchange Agreement Form With United States In Nassau
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A Qualified Intermediary, or QI, is an independent third party to the transaction whose function is to prepare the documents necessary to create the exchange, as well as to act as the independent escrow agent for the exchange funds.
While foreign property is not of a like kind with domestic property, foreign properties are considered like-kind with one another. You can perform a 1031 exchange with foreign properties, so long as your relinquished and replacement properties are both located outside the United States.
What Is a Qualified Intermediary? Qualified Intermediary (QI) is someone a property seller selects to oversee the 1031 exchange process and its funds. They hold the funds from the previous property and use them to acquire the new replacement property to ensure compliance with IRS regulations.
How to Do a 1031 Exchange Choose a qualified intermediary to coordinate the exchange. Sell your current real estate property. You have 45 days to identify potential replacement properties. You have 180 days to close on a replacement property. File IRS Form 8824.
Section 1031 is part of federal law, so it applies to federal taxes, which are the same no matter what state you're in. You can perform a 1031 exchange between business or investment properties located anywhere in the United States, so long as they meet all other 1031 requirements.
A 1031 exchange does not obviate the need for a realtor. Quite to the contrary, in most cases an Exchanger has an even greater need for a realtor due to the time constraints placed on Exchangers.
While it may be tempting to ask your CPA to act as your Qualified Intermediary, a CPA cannot facilitate a 1031 exchange between investors. Under IRC Section 1031 guidelines, CPAs, attorneys, investment bankers, and real estate agents/brokers fall under the 'agent' category.
In New York, property types eligible for a 1031 exchange must be like-kind, which generally means both the relinquished and replacement properties should be used for business or investment purposes. Both properties must be within the United States.
A frequently asked question connected to the 1031 exchange is, “Can you execute a 1031 exchange between states?” At the federal level, the answer is a definitive “yes.” Internal Revenue Code 26 U.S. Code § 1031 – “Exchange of Real Property Held for Productive Use or Investment” – falls under federal tax legislation.
In an IRC §1031 transaction, you can exchange real property for virtually any other real property in the United States, as long as the property is held for productive use in a trade or business or for investment purposes.