Who Holds the Proceeds in a 1031 Exchange in Myrtle Point, OR?

In a 1031 exchange, the proceeds from the sale of the relinquished property cannot be held by the taxpayer (investor) in Myrtle Point, OR or anyone closely related to them. If the taxpayer in Myrtle Point, OR receives or controls the funds, even temporarily, the exchange will be disqualified, and capital gains taxes will be owed.

What Is a Qualified Intermediary (QI) in a 1031 Exchange in Myrtle Point, OR?

A Qualified Intermediary (QI)—also called an Accommodator or Exchange Facilitator—is a neutral third party who holds the proceeds from the sale in Myrtle Point, OR to ensure the transaction complies with IRS Section 1031 rules.

Who Holds the Proceeds in a 1031 Exchange in Myrtle Point, OR?

What Does a Qualified Intermediary Do in Myrtle Point, OR?

A QI plays a critical role in completing a valid 1031 exchange by:

  • Holding the Proceeds Securely – The QI keeps the funds in a separate escrow account until they are used to purchase the replacement property.
  • Facilitating the Exchange Process – The QI ensures compliance with IRS deadlines, including the 45-day identification period and 180-day purchase period in Myrtle Point, OR.
  • Preventing Disqualification – By handling the funds, the QI ensures the investor does not have constructive receipt of the money, which would invalidate the exchange.
1031 exchange compliance rules in Myrtle Point, OR

Who Can Be a Qualified Intermediary in Myrtle Point, OR?

To qualify as a QI in Myrtle Point, OR, the individual or company must be an independent third party. The following people cannot act as a Qualified Intermediary:

  • The taxpayer (investor) in Myrtle Point, OR themselves
  • A family member or anyone related to the taxpayer
  • The taxpayer’s real estate agent, attorney, accountant, or financial advisor (if they provided services within the last two years)
  • A business partner or anyone with a financial interest in the transaction
Tax benefits of using a QI in Myrtle Point, OR

What Happens If the Investor Holds the Proceeds in Myrtle Point, OR?

If the investor or a disqualified person in Myrtle Point, OR takes control of the 1031 exchange proceeds, the IRS will invalidate the exchange. This means:

  • The investor in Myrtle Point, OR owes capital gains taxes on the sale.
  • Depreciation recapture taxes may be due.
  • The investor could also face a net investment income tax, depending on their tax situation in Myrtle Point, OR.

How to Ensure a Successful 1031 Exchange in Myrtle Point, OR

To defer capital gains taxes successfully in Myrtle Point, OR, the 1031 exchange funds must be held by a Qualified Intermediary who is independent and unrelated to the taxpayer. Always work with a reputable QI and consult a tax professional in Myrtle Point, OR to avoid costly mistakes.

Real estate investor in a 1031 exchange in Myrtle Point, OR

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Secure escrow account for 1031 funds in Myrtle Point, OR