As a Qualified Intermediary (QI), 1031 CORP. acts as the facilitator or middleman in an exchange. The word “qualified” refers to the intermediary’s relationship to the Taxpayer. To be a “qualified” intermediary, the party must not be the actual Taxpayer or the Taxpayer's accountant, attorney, real estate professional, financial planner, employees, partners or close relative.
Ideally, the Taxpayer will notify 1031 CORP. one to two weeks prior to the scheduled closing of the relinquished property. This allows your Exchange Officer to prepare and forward the exchange documents to you with sufficient time to review and return them. It also enables your Exchange Officer to give the closing agent ample notice that the transaction is part of a 1031 exchange. If the exchange was not planned in advance, we can initiate an exchange at the last minute, even while you are sitting at the closing table. However, once the closing is complete and title of the relinquished property is conveyed to the buyer, it is too late to initiate the exchange and the sale will be a taxable event.
An Exchange Accommodation Titleholder (EAT) is used to complete a reverse exchange or improvement exchange. In a reverse exchange, the EAT holds legal title to either the relinquished or replacement property until the relinquished property can be conveyed to a buyer. In an improvement exchange, the EAT holds legal title to the replacement property and makes the identified improvements before conveying the improved property to the Exchanger within the 180-Day Exchange Period.
A reverse or improvement exchange takes longer to properly structure so much time is needed. Please contact 1031 CORP. as early in the process as possible.