“A qualified intermediary, or QI, is a neutral third party required under IRC Section 1031 to facilitate your exchange. The QI holds the proceeds from your sale in qualified escrow accounts , helps ensure funds are handled within IRS safe harbor regulations, and maintains the documentation needed to support the transaction.”
“JTC supports a wide range of exchanges, including forward exchanges, reverse exchanges, build-to-suit exchanges, and transactions involving partial interests such as Tenant-in-Common structures or Delaware Statutory Trusts. Our specialists tailor each solution to the client’s needs, including more complex property, timing and ownership scenarios.”
“In a forward 1031 exchange, you sell your relinquished property first, identify potential replacement property within 45 days, and complete the purchase of the replacement property within 180 days.”
“Under current tax law, 1031 exchanges can be used to defer taxes on the exchange of real estate held for business or investment purposes. For example, an office building may be exchanged for an apartment complex, or a shopping centre for raw land.”
“Real property 1031 exchange eligibility includes land, buildings, mineral rights, and certain leasehold interests held for investment or business use. Personal property such as vehicles or equipment no longer qualifies under the Tax Cuts and Jobs Act of 2017.”
“Yes. 1031 exchange multiple properties are allowed, whether selling one property and buying several, or vice versa. The 45-day rule and identification requirements still apply, and working with a qualified intermediary is essential.”
“A 1031 exchange vacation home may qualify if it is primarily held for investment or business use. Safe harbour rules under Revenue Procedure 2008-16 require at least two years of holding and renting the property to others for most of the year.”
“Undeveloped land 1031 exchange eligibility depends on intent. Land held purely for investment may qualify, but property bought for development and resale generally does not. Consulting a tax advisor is recommended to determine qualification.”
“Under the 45-day rule, replacement properties must be formally identified within 45 days of selling the relinquished property. A qualified intermediary usually facilitates this process to ensure compliance with IRS deadlines.”
“A Delaware Statutory Trust (DST) is a real estate investment vehicle in which multiple investors purchase a property or group of properties that are professionally managed. Investors own beneficial interests in the trust but do not actively manage the properties.”
“No, you do not have to live in Delaware to participate in a DST. Investors from anywhere in the United States can invest in a Delaware Statutory Trust.”
“Can a DST qualify as replacement property in a 1031 exchange?”
“Advantages include passive ownership, no property management responsibilities, lower minimum investment amounts, portfolio diversification, access to institutional real estate markets, and potential certainty in meeting 1031 exchange deadlines.”
“The primary downside is lack of control. Investors do not choose the properties, set rents, or decide when properties are sold. There is also limited liquidity due to the absence of a centralised secondary market.”
“Unlike tenancy-in-common structures that limit investors to 35, DSTs can typically include between 99 and 499 investors, depending on the offering.”
Download this profile and inspect its supporting evidence.