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1031 Exchange

Work with One of the Nation’s Most Trusted 1031 Exchange Accommodators

At JTC, the security of our exchange clients’ funds comes first. When selecting a Qualified Intermediary, entrust your exchange to a partner that has a reputation for going the extra mile.

IRC Section 1031 allows U.S. property owners to defer capital gains and other taxes on the sale of business or investment property by purchasing like-kind property. With a 1031 like-kind exchange, investors can invest more in their businesses, retirement, and their families’ futures. (To learn more about how 1031 works, read our 1031 Exchange Guide.)

An important part of any exchange is the Qualified Intermediary (QI), which holds funds during the exchange. Incorrect handling of funds can cause an exchange to be deemed invalid, making it vital for exchangers to select a QI they trust to do things right.

The JTC 1031 Exchange team has established an industry-leading track record over the past 30 years, due in large part to our in-house expertise. Members of our legal and client services team, which includes Certified Exchange Specialists (CES®), have decades of experience handling 1031 exchanges, including everything from small single-family rental properties to large commercial real estate transactions.

The team is supported by our cloud-based Exchange Manager platform, purpose-built to maximize transaction security and transparency. Offering 24/7 visibility from anywhere in the world, this intuitive online portal helps exchangers monitor exchange transactions and access important tax information.

“There are a lot of ways a 1031 exchange can go wrong, which is why it is important to work with an experienced team. JTC has built its reputation through decades of successful transactions so you can feel confident you are working with a team that has expertise in all manner of exchange scenarios.”

What We Do

An important aspect of a like-kind exchange is that the exchanger cannot take receipt of sales proceeds during the exchange. JTC acts as a Qualified Intermediary (QI), receiving the sales proceeds from the relinquished property sale and holding them until they are released to purchase the replacement property.

There are many types of 1031 exchanges, including forward and reverse exchanges and those involving multiple properties or Delaware Statutory Trusts. JTC works with our clients to determine the best methods for their particular exchanges and the solutions required to ensure success for each unique situation.

Because of our commitment to security, transparency, and regulatory compliance, JTC helps our 1031 exchange clients execute successful exchanges that achieve tax deferral while also offering them peace of mind that their funds are being handled properly.

Why Choose JTC

Extensive 1031 Experience and Expertise

Our legal and client services teams’ experience in accounting, banking, and technology sets us apart. We can handle large and complicated exchange scenarios that many Qualified Intermediaries cannot.

Ultimate Transparency

When an exchange is conducted with JTC, clients get 24/7 access through our online Exchange Manager portal, which displays up-to-date exchange status information and provides a comprehensive audit trail.

Industry-Leading Security and Safeguards

We were the first to implement security measures that are now industry standard, such as:

  • Exchange funds are only held in FDIC-insured, fully liquid accounts at highly rated banks
  • Professional Indemnity Insurance and cyber insurance
  • Exchange funds are placed in individual qualified escrow accounts
  • Exchange funds are never commingled in operating accounts
  • Funds are released from escrow only with approval of both the Qualified Intermediary and the exchanger

Key Features

  • Purpose-Built Exchange Manager Platform
  • 24/7 Access to Exchange Information
  • Dual-Authorization Disbursements of Funds
  • Funds Held in Segregated and Insured Accounts
  • Automated Document Management
  • Dedicated Client Services Team

Types of Exchanges

  • 1031 Forward Exchanges

This solution enables clients to defer capital gains and depreciation recapture taxes when they sell a business or investment property and buy like-kind property of equal or greater value. In a forward exchange, it is sell first, then buy.

1031-Timeline

Read More About 1031 Forward Exchanges

  • 1031 Reverse Exchanges

A reverse exchange gives the exchanger the flexibility to acquire the replacement property first and sell their relinquished property later. This is done utilizing a “parking arrangement” whereby the Exchange Accommodation Titleholder (EAT) holds the replacement property until the relinquished property can be sold. With a reverse exchanges, it’s buy first, then sell.

Read More About 1031 Reverse Exchanges 

  • Delaware Statutory Trusts

Delaware Statutory Trusts (DSTs) provide an alternative replacement property for 1031 exchangers, utilizing special provisions of Delaware trust law to create an investment vehicle that can purchase a diverse range of properties. Exchangers who purchase units in a properly-structured DST are treated as having acquired their proportionate interest in the trust-owned real estate, meaning a DST interest can be used as a 1031 replacement property. DSTs offer the advantages of professional real estate management and portfolio diversification alongside the potential for a monthly income stream.

Learn More About Delaware Statutory Trusts

For DST managers, JTC offers end-to-end services that include trustee services in Delaware, DST administration, and QI services for investor 1031 exchanges into and out of the trust. Our deep understanding of DST rules allows us to properly create the trust structure within IRS and Delaware guidelines, and a streamlined subscription process allows for fast onboarding. Customizable administration means our clients can get the services they need for each stage of the trust’s lifecycle, with the ability to add further services as they go.

Learn More About JTC’s Delaware Statutory Trust Administration Services

Resources

Washington state law, RCW 19.310.040, requires an exchange facilitator to either maintain a fidelity bond in an amount of not less than one million dollars that protects clients against losses caused by criminal acts of the exchange facilitator, or to hold all client funds in a qualified escrow account or qualified trust that requires your consent for withdrawals. All exchange funds must be deposited in a separately identified account using your taxpayer identification number. You must receive written notification of how your exchange funds have been deposited. Your exchange facilitator is required to provide you with written directions of how to independently verify the deposit of the exchange funds. Exchange facilitation services are not regulated by any agency of the state of Washington or of the United States government. It is your responsibility to determine that your exchange funds will be held in a safe manner.

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