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$650 covers you for one relinquished property and one replacement property.

An additional $175 will be charged for each replacement property purchased afterwards.

There's a $30 wire fee for outgoing wires.

That's it.

AND we pay interest on the funds while we
hold them.

What is the Role of the Qualified Intermediary?

The role of the Qualified Intermediary is essential to completing a successful and valid delayed exchange. The Qualified Intermediary is the glue that puts the buyer and seller of property together into the form of a 1031 Exchange. Where such an intermediary (often called an exchange facilitator) is used, the intermediary will not be considered the agent of the taxpayer for constructive receipt purposes notwithstanding the fact that he may be an agent under state law and the taxpayer may gain immediate possession of the money or property under the laws of agency.

In order to take advantage of the qualified intermediary "safe harbor" there must be a written agreement between the taxpayer and intermediary expressly limiting the taxpayer's rights to receive, pledge, borrow or otherwise obtain the benefits of the money or property held by the intermediary.

A qualified intermediary is formally defined as a person who is not the taxpayer or a disqualified person who enters into a written agreement (the "exchange agreement") with the taxpayer and, as required by the exchange agreement, acquires the relinquished property from the taxpayer, transfers the relinquished property, acquires the replacement property, and transfers the replacement property to the taxpayer. The qualified intermediary does not actually have to receive and transfer title as long as the legal fiction is maintained.

The intermediary can act with respect to the property as the agent of any party to the transaction and further, an intermediary is treated as entering into an agreement if the rights of a party to the agreement are assigned to the intermediary and all parties to the agreement are notified in writing of the assignment on or before the date of the relevant transfer of property.
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This provision allows a taxpayer to enter into an agreement for the transfer of the relinquished property (i.e., a contract of sale on the property) and thereafter to assign his rights in that agreement to the intermediary. Providing all parties to the agreement are notified in writing of the assignment on or before the date of the transfer of the relinquished property, the intermediary is treated as having entered into the agreement and, upon completion of the transfer, as having acquired and transferred the relinquished property.

There are no licensing requirements for Intermediaries. They need merely be not an unqualified person as defined by the Internal Revenue Code in order to be qualified. The Code prohibits certain "agents" of the taxpayer from being qualified. Accountants, attorneys and realtors who have served taxpayers in their professional capacities within the prior two years are disqualified from serving as a Qualified Intermediary for a taxpayer in an exchange.

The Qualified Intermediary does not provide legal or specific tax advice to the exchanger, but will usually perform the following services:

1. Coordinate with the exchangers and their advisors, to structure a successful exchange.

2. Prepare the documentation for the Relinquished Property and the Replacement Property.

3. Furnish escrow with instructions and documents to effect the exchange.

4. Secure the funds in an insured bank account until the exchange is completed.

5. Provide documents to transfer Replacement Property to the exchanger, and disburse exchange proceeds to escrow.

6. Hold the document of Identification of Replacement Properties sent by the Taxpayer.

7. Submit a full accounting of the Exchange Funds for the Taxpayer's Records.

8. Submit a 1099 to the Taxpayer and the IRS for any growth proceeds paid. And overall, Provides Quality Service:

Although the process is relatively simple, the rules are complicated and filled with potential pitfalls. Haven Exchange, Inc. has developed a reputation as the industry leader because of our unyielding commitment to our clients. Haven Exchange, Inc. works closely with all parties involved in an exchange to ensure a smooth transaction.

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