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

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.

Open video in a modal

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.

Now celebrating 25 years, TowneBank operates 50 banking offices throughout Hampton Roads and Central Virginia, as well as Northeastern and Central North Carolina – serving as a local leader in promoting each community's social, cultural, and economic growth. Towne offers a competitive array of business and personal banking solutions, delivered with only the highest ethical standards. Experienced local bankers providing higher expertise and personal attention with local decision-making are key to the TowneBank strategy. Towne has grown its capabilities beyond banking to provide expertise through its affiliated companies that include Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices RW Towne Realty, Towne 1031 Exchange, and Towne Vacations. With total assets of $16.84 billion as of December 31, 2023, TowneBank is one of the largest banks headquartered in Virginia.