I am a real estate investor in Seattle and am looking for a contact for a reputable CPA to help with a 1031 exchange. Has anyone here in Seattle done one that can please provide some guidance or point of contact?
@Jonathon Nguyen , You're actually going to need both a cpa/accountant and a QI. The CPA obviously advises you on specific tax matters, does your returns and specifically will file the form 8824 with your next tax return that reports the results of the 1031 and sets up the new property.
The QI is the unrelated 3rd party who's only function is the documentation and process of the 1031 exchange itself.
Neither your QI or accountant have to be in close proximity to you. If you process strategy better face to face then a CPA close by might be beneficial. For a QI it's even less important and since 1031 is a federal statute and a lot of exchanges start in one state and end in another, the national experience of the QI is much more important than their location.
We have done two 1031 exchanges in the last couple years. We used two different qualified intermediaries for our exchanges but both were for replacement properties in WA state. The QI basically handles all the paperwork for a fee (the fees can range greatly). Both of our experiences were good but I would ask your agent / title company for recommendations as things change overtime.
Regardless, you need to stay engaged and on top of the transaction with both the QI and title as stuff can still get missed. Ultimately, this is your transaction and while each of these players are working on their portion of the deal, it’s your money, vision and your potential tax liability. Staying engaged and ensuring you get your desired outcome will be well worth the time.
"QI" is "qualified intermediary"?
@Alex B., Yep. the Qualified Intermediary (QI) is a term used by the IRS to define the unrelated 3rd party who documents the 1031 exchange takes custodianship of the proceeds from the sale to the purchase and interfaces with the escrow officers on both sides. in sec 1031 of the code the IRS requires that a QI is used and that they are in place prior to the closing of your sale.