A Qualified Intermediary (QI) facilitates a 1031 exchange by entering into a written exchange agreement with the taxpayer and handling the exchange transactions as required by the agreement.

The QI helps coordinate the sale of the relinquished property, holds the exchange proceeds under the exchange arrangements, and facilitates the acquisition of replacement property.

Using a properly structured Qualified Intermediary arrangement is an important part of a typical deferred 1031 exchange.

In a standard deferred 1031 exchange, there are two important deadlines:

45-Day Identification Period: You generally have 45 calendar days from the transfer of your relinquished property to identify potential replacement properties in writing.

180-Day Exchange Period: You generally have 180 calendar days from the transfer of your relinquished property to acquire the replacement property.

The acquisition deadline is actually the earlier of 180 days or the due date of your federal income tax return, including extensions, for the year of the transfer.

Both deadlines are strict, so planning ahead is essential.

You should contact your Qualified Intermediary before closing on the sale of your investment property.

The exchange should be properly established before the relinquished property is transferred. Once you close and receive the sale proceeds, it is generally too late to establish a standard deferred exchange.

We recommend involving Accountable 1031 as early as possible so the transaction can be properly coordinated.

Yes. You do not need to identify or purchase your replacement property before selling your existing investment property.

In a standard deferred exchange, you can sell first and then use the 45-day identification period to identify potential replacement properties.

You must still meet the applicable identification and acquisition deadlines.

Yes. IRS regulations generally provide three identification methods:

• Three-Property Rule: Identify up to three replacement properties, regardless of their value.

• 200% Rule: Identify any number of properties, provided their combined fair market value does not exceed 200% of the value of the relinquished property.

• 95% Rule: Identify any number of properties, provided you acquire at least 95% of the aggregate fair market value of all properties identified.

Yes. A 1031 exchange can involve multiple relinquished properties, multiple replacement properties, or a combination of both.

These transactions often require additional planning and coordination, particularly when properties have different closing dates or ownership structures.

Accountable 1031 has experience coordinating complex and multi-property exchanges.

Yes, potentially. This is known as a reverse 1031 exchange.

Reverse exchanges require a different structure than standard forward exchanges and commonly involve an Exchange Accommodation Titleholder (EAT) that temporarily holds title to one of the properties.

These transactions require advance planning and should be discussed with your Qualified Intermediary before purchasing the replacement property.

Yes. Real property held by an LLC or partnership may qualify for a 1031 exchange if the applicable requirements are met.

However, the ownership structure matters. An entity that owns real estate is generally treated differently from an individual partner or member who owns an interest in that entity.

A partnership interest itself generally does not qualify for tax-deferred treatment under Section 1031.

Transactions involving partners or LLC members with different investment goals require careful advance planning.

If you do not acquire qualifying replacement property within the applicable exchange period, the exchange generally fails to qualify for full tax deferral.

Any gain that was intended to be deferred may become taxable, subject to the applicable tax rules.

This is why it is important to understand your deadlines before entering into an exchange..

At Accountable 1031, protecting exchange funds is one of our highest priorities.

Exchange funds are deposited only with FDIC-insured financial institutions that have investment-grade ratings, or subsidiaries of investment-grade institutions. We do not invest exchange funds in alternative securities.

Individual bank deposit accounts holding exchange funds are uniquely associated with each taxpayer's name and tax identification number.

Upon request, we provide bank statements and can arrange direct communication with the bank so clients can independently verify their funds. Insured Cash Sweep (ICS) accounts are also available upon request.

FDIC insurance coverage is subject to applicable ownership-category, deposit-limit, and other program rules.

No. Accountable 1031 provides Qualified Intermediary services and exchange coordination. We do not provide tax or legal advice.

We encourage clients to work with their CPA, tax advisor, and attorney to evaluate the tax consequences and legal requirements of their specific transaction.

Our team works alongside your professional advisors to help coordinate the Qualified Intermediary aspects of the exchange.