Understanding the Rewards of a Bank-Owned Qualified Intermediary for Your 1031 Exchange

Written By: Leila Bradley, CES®

A wealth of benefits can be found when you engage a bank-owned qualified intermediary for your 1031 exchange needs. I've personally handled thousands of 1031 exchanges and can attest to the convenience and efficiency a bank-owned intermediary can provide you.   

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Unraveling the Intricacies of the 1031 Exchange Procedure

The 1031 exchange process, which is often complex, can be significantly simplified by using the services of a bank-owned qualified intermediary. The 1031 exchange, also known as a like-kind exchange, is a method that allows real estate investors to defer capital gains taxes when selling an investment property and purchasing another of a similar kind. The procedure is strictly regulated by the Internal Revenue Code Section 1031 and has specific prerequisites and deadlines. 

A key player in a 1031 exchange is a bank-owned qualified intermediary like Towne 1031 Exchange. We facilitate your exchange, ensuring compliance with IRS guidelines and managing the funds during the transaction.

Below are a few benefits of using a bank-owned intermediary for your 1031 Exchange:

  1. Understanding the Process - We deeply understand the exchange process and can guide you through each phase, minimizing the risk of errors or non-compliance. 
  2. Safeguard your Funds - As a bank-owned qualified intermediary, we can safeguard your funds during the exchange and ensure that the strict requirement of no direct receipt of funds is met, preserving the tax-deferred status throughout the transaction. 
  3. Personalized Service - When you work with Towne 1031 Exchange, you get personalized service, no matter where you are.  
  4. Assurance - Opting for a bank-owned qualified intermediary, such as Towne 1031 Exchange, adds an extra layer of assurance. The backing of a reputable financial institution provides confidence that your funds are safe and secure. 
  5. Speed – Towne 1031 can set up your exchange quickly since we handle all aspects of your exchange in-house.  Everything from preparing your exchange documents and opening an account where your exchanged funds will be wired. Every aspect of your replacement property closing is handled by our expert team quickly and efficiently. 

Maximizing Tax Deferral with a Bank-Owned Qualified Intermediary 

Employing a bank-owned qualified intermediary for a 1031 exchange can greatly enhance your financial management. The bank holds the proceeds from the sale of your property and ensures they are correctly reinvested into a replacement property. This indirect receipt of funds allows you to defer capital gains tax and possibly save significant amounts of money. 

One of the key tax advantages of engaging a qualified intermediary is the ability to defer capital gains tax. By reinvesting your proceeds into a replacement property within a specified timeframe, you can delay the payment of capital gains tax. This allows you to utilize more of your money in the short term and potentially benefit from appreciation or other investment opportunities. 

At Towne 1031, we specialize in maximizing tax deferral and optimizing your financial outcomes. Our bank-owned qualified intermediary services provide a seamless and secure 1031 exchange process, ensuring compliance with IRS regulations and helping you capitalize on your tax advantages. 

Bank-Owned Qualified Intermediary: Your Guide to Success 

A bank-owned qualified intermediary is instrumental in guiding individuals through the process and maximizing the benefits of the 1031 exchange, but you also get expert guidance. In 2023, I earned my Certified Exchange Specialist (CES) certification, which is a voluntary certification offered through the Federation of Exchange Accommodators (FEA) and is designed specifically for tax deferred exchange professionals. In addition, Ute Heidenreich, who I partner with at Towne 1031, is general counsel for TowneBank and is President of Towne 1031 Exchange. She was named among Virginia Business' 2023 Legal Elite as well as CoVA Biz Magazine's 2024 Top Lawyer's List and has over 25 years of experience in this industry. Together, we provide in-depth knowledge and experience in facilitating 1031 exchanges, and act as your trusted advisor.

Ready to get started on your 1031 Exchange? Contact us today!

Towne 1031 Exchange does not provide tax or legal advice. Please consult an accountant and/or attorney.  

The information provided is not intended to be legal, tax, or financial advice or recommendations for any specific individual, business, or circumstance. TowneBank cannot guarantee that it is accurate, up to date, or appropriate for your situation. Financial calculators are provided for illustrative purposes only. You are encouraged to consult with a qualified attorney or financial advisor to understand how the law applies to your particular circumstances or for financial information specific to your personal or business situation.

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