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How to Choose a 1031 Exchange Facilitator

Government Regulations Provide Little Protection

There are no federal regulations for 1031 exchange facilitators and only two states have licensing and bonding requirements. It's important that you know what to look for in order to ensure you get the best possible exchange services for your transaction. Don't fall victim to a poor facilitator who may: not do an exchange because they don't know how to structure it; not pass an IRS audit; lose the exchange funds due to poor investing or possibly deception.

Choose a company and an exchange representative that:

A 1031 Exchange Facilitator Must be Proactive to Stay Current with 1031 Tax Code Changes

Between 1921 and 1984 the tax code regarding 1031 exchanges involved simultaneous, two-party exchanges, in rural situations where one farmer swapped a few acres with his neighbor. Over time, the farmers moved into the cities, then there were apartment house building swaps and it grew from there. The exchange parties always did the swaps in one escrow office, on the same day - until 1984.

Tax laws continue to change and evolve. Ensure your facilitator is a full time, experienced professional who is up to date with the code changes and can help you understand how these laws relate to your situation.

For more information about 1031 exchanges contact us.

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