What is a 1031 accommodator?

What is a 1031 accommodator?

An Accommodator (Qualified Intermediary) is someone who facilitates your 1031 exchange. The Accommodator should be a corporation that is in the full-time business of offering qualified intermediary services. The role of an accommodator is similar, but not identical to the role of an escrow company.

How do I find a qualified intermediary for a 1031 exchange?

A CPA with 1031 exchange experience, a real estate attorney, or a reputable title company can be good sources for referrals to qualified intermediary services. Another excellent source for finding a knowledgeable qualified intermediary is through the Federation of Exchange Accommodators (FEA).

Does California recognize 1031 exchanges?

California recognizes 1031 Exchanges which allows an investor to defer capital gains taxes as long as you are purchasing another “like-kind” property to replace the one you are selling. California does recognize it if you purchase your upleg in another state, but beware of the above “Clawback” rule.

What are typical 1031 exchange fees?

The direct cost to you in a 1031 exchange typically comes in the form of a fee paid to your QI. QI fees vary, but most reports indicate that a typical deferred 1031 exchange costs between $600 and $1,200. Certain incidental expenses may also be passed on to you.

HOW DOES A QI make money?

Interest Income A large portion of a QI’s role in a 1031 exchange is holding funds obtained from the sale of the relinquished property in escrow until a replacement property is identified and purchased. Consequently, Qualified Intermediaries earn a large portion of their fees via interest income from these funds.

Who is the accommodator in Baird Publishing exchange?

Baird Publishing Co., 39 TC 608 (1962), acq., 1963-2 CB 4. An accommodator is a person independent of the taxpayer that takes title to the replacement property in the construction exchange, so that the taxpayer does not own both the replacement property and relinquished property at the same time.

Does Wells Fargo offer 1031 exchanges?

Best for Financing Properties Wells Fargo The company doesn’t offer tax or legal services or advice. However, it does offer 1031 exchange services as well as notary and financial advisory, mortgage, and banking services. It deposits the 1031 exchange funds into in-house FDIC accounts.

Can a Realtor do a 1031 exchange?

Real estate agents play a significant role during the course of a real estate transaction. A 1031 exchange allows a seller of real estate to defer the payment of taxes which would otherwise be due upon selling property. The tax deferral occurs when the seller acquires new property to replace the property that was sold.

Can you buy first in a 1031 exchange?

What ever your reason for deciding to purchase your replacement property first, the Reverse 1031 Exchange allows you to acquire your replacement property first and then subsequently list and sell your relinquished property within the prescribed 1031 Exchange deadlines.

What property qualifies for a 1031 exchange?

The types of properties that qualify for a 1031 exchange are those held for investment or for productive use in a trade or business. Any property that is considered real property under Florida law is “like-kind” with any other property that is considered real property under Florida law.

What qualifies for a 1031 exchange?

As mentioned, a 1031 exchange is reserved for property held for productive use in a trade or business or for investment. This means that any real property held for investment purposes can qualify for 1031 treatment, such as an apartment building, a vacant lot, a commercial building, or even a single-family residence.

Should I do a 1031 exchange or not?

If you want to move away from day-to-day, hands-on property management, or want to leverage tax benefits of greater depreciation, higher tax-deductible expenses, or are looking for a better asset in a more desirable market, then it’s time to consider the benefits of a 1031 exchange.

What does it cost to do a 1031 exchange?

There can be significant costs associated with a 1031 exchange. You can expect to pay a fee around $1,000 for a standard 1031 exchange, and the facilitator can earn thousands of dollars in interest income. If you had sold the property and held onto the proceeds, you could have made that money yourself.