This agreement will allow the intermediary to receive the funds from the sale of your relinquished property, hold those funds, and then eventually use them to purchase your replacement property. Once you have identified a Qualified Intermediary you wish to use, you will enter into an Exchange Agreement with the Qualified Intermediary. As soon as you decide to conduct a 1031 exchange, be sure to tell any professionals you will be working with during the exchange (i.e., your attorney, your real estate agent, etc.) of your intent so they can properly assist you in conducting the transaction.Įnter into an Exchange Agreement with the Qualified Intermediary.A real estate agent will also be helpful-especially if they have been a part of a 1031 exchange before-and should know what language to insert in the relevant contracts to make the exchange go as smooth as possible.
An attorney, tax specialist, or accountant will not only help you understand exactly what you need to do in order to conduct a valid 1031 exchange but can also ensure that you don't make any mistakes during the process.Because tax laws change and new tax regulations are issued periodically, your best bet for a successful 1031 exchange is to enlist the help of a professional.
In order to conduct a 1031 exchange-and safely navigate the complexities of the relevant provisions of the Internal Revenue Code-you should either (1) have a sophisticated understanding of the portions of the United States Code governing 1031 tax-deferred exchanges X Research source or (2) find a qualified professional to assist you. Consider hiring professionals to assist you.