You Need to Know with Tax Season Approaches: Qualified Intermediary

As 2015 drives to a close there are many different questions that individuals consider, whether it’s relating to what they can deduct on their business expenses or issues having to do with income deferral or asset purchases. As Congress anticipates renewal of more than 50 tax provisions, it is important for you to understand what impacts you regarding changes as well as what intends to stay the same.
One possible option to consider in the upcoming year if you are interested in deferring taxes is to use a 1031 exchange. 1031 activity may involve selling real estate for relocation purposes and following upon the 2014 changes in tangible personal property rules for selling or replacement of obsolete assets.
Looking at possible complications with a 1031 exchange, many of these can be avoided by hiring an experienced qualified intermediary to help you with the process. You need to comply with strict IRS guidelines in terms of handling your 1031 exchange and you can do this successfully by working with a qualified intermediary who has handled these kinds of cases before. A qualified intermediary simply applies and receives funds on your behalf for the purposes of the exchange.
This is so that your exchange can be classified as safe harbor and so that you can receive the tax deferment associated with selling a piece of property and replacing it with one or more pieces of property. Hiring the right 1031 qualified intermediary is essential as making mistakes or hiring someone who doesn’t have an appropriate background in this field could lead to your exchange being disqualified for the IRS. Having a qualified intermediary who has handled situations like this before gives you a sense of confidence and peace of mind about what you should do and how you can make the most out of an exchange like this.