Friday, January 30th, 2009
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How Can You Keep Your Money Safe During a 1031
Tax Deferred Exchange?
Many people feel uneasy in today’s uncertain economic times. This can be especially so in a 1031 exchange.
When you are doing a typical delayed 1031 exchange, you are assigning to your qualified intermediary (or “QI”) the rights to take your money from the sale of your old relinquished property…but do you really know what happens to your money while your QI is holding it for you? How can you feel safe?
The Answer is 100% Transparency
100% transparency means complete openness and clear communication in your 1031 exchange agreement. Your QI should agree in writing that:
- Your money will not be mixed or commingled with any other customers funds or with the operating account of the QI;
- Your money will be deposited directly (immediately after closing of the sale) into a separate segregated FDIC insured bank account; and
- Your money will earn a specified rate of interest.
