🌟 1031 Exchange QI Selection: Relationship & Reputation Deep Dive (Part 3/3

[Bruce D. Kowal]

Hey BP Family! Let's wrap up our QI selection series with the human element - because relationships and reputation can make or break your exchange! 🤝

[I am not sure I fully understood what I was getting into when I undertook this research.  But the entire §1031 field is very misunderstood, and opaque.  By and large, QI's have very high ethical standards, and are sometimes overlooked as the engines of this tax saving tactic.]

REPUTATION MARKERS 📊

INDUSTRY STANDING

Membership in professional organizations

Leadership roles in FEA

Educational contributions to the industry

Relationships with major title companies

CLIENT RELATIONSHIPS 👥

Testimonials from CPAs and attorneys

References from title companies

Long-term client relationships

Transparent fee structures

RELATIONSHIP RED FLAGS 🚩

Overly familiar with your realtor/broker

Kickback arrangements (illegal!)

Pressure to use affiliated services

Hidden fee structures

PROFESSIONAL BOUNDARIES ⚖️

Good QIs maintain:

Clear fee disclosures

Written policies

Professional distance

Ethical guidelines

WATCH OUT FOR 👀

QIs who:

Push investment products

Offer tax or legal advice without credentials

Suggest "creative" solutions

Promise guaranteed returns on exchange funds

BEST PRACTICES FOR VETTING 📋

Check multiple references

Verify professional memberships

Research online presence

Review complaint history

Examine years in business

INDEPENDENCE MATTERS! 🎯

Your QI should be:

Independent from your transaction

Free from conflicts of interest

Focused solely on exchange services

Clear about their role limitations

PRO TIP: Per IRC §1031(k), your QI cannot be:

Your agent

Your attorney

Your CPA

Your realtor

Your relative

within 2 years of the exchange!

RELATIONSHIP WITH YOUR ADVISORS 🤝

Good QIs:

Work well with your team

Respect professional boundaries

Communicate clearly

Stay in their lane

Remember: The best QI relationships are professional, not personal!

FINAL THOUGHTS 💭

Trust your instincts

Value experience over charm

Prioritize competence over cost

Document everything

Drop questions below! Share your QI experiences!

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