Insights

Understanding the Role of a Qualified Intermediary

A key component of successfully executing a 1031 exchange is using a qualified intermediary (QI). The QI serves as an independent third party that facilitates the exchange process. It holds the proceeds from the sale of the relinquished property and is responsible for using those funds to purchase the replacement property.

Deviation from regulatory guidelines may disqualify the transaction, making ALL gains immediately taxable. Choosing a qualified intermediary is crucial, as they must be knowledgeable about the 1031 exchange regulations and ensure compliance throughout the process. A reputable QI will also provide guidance on the timelines and procedures involved, which can be complex.

What to Look For When Choosing a Company

• Experience and Reputation: Look for a company with extensive experience handling 1031 exchanges. Research its reputation and seek reviews from past clients to gauge its reliability.
• Fees and Transparency: Understand their fee structure and ensure there are no hidden costs. A trustworthy company will openly communicate all fees involved in the exchange process.
• Compliance Knowledge: The company you choose should demonstrate a strong understanding of IRS regulations involving 1031 exchanges and should be able to provide you with clear guidance about maximizing benefits and minimizing risk so you can attain your goals.
• Customer Service: An approachable team that is willing to answer your questions and support you throughout the process is essential. You want to feel comfortable reaching out for assistance whenever needed.
• Written Agreement: Any reputable company will provide a clear written agreement outlining the terms of the exchange, which protects both parties involved.

In conclusion, a 1031 exchange can be a powerful tool for real estate investors seeking to grow their portfolios while minimizing tax burdens. By understanding what a 1031 exchange is, its benefits, and risks, and how to choose a qualified intermediary, you can effectively navigate this valuable investment strategy.

Pacific Premier Trust is Affiliated with Pacific Premier Bank

That means you can access a full suite of financial solutions, including 1031 exchanges through Pacific Premier Bank’s 1031 Exchange Division.

Whether you are managing retirement assets through a self-directed IRA or looking for 1031 exchange services, Pacific Premier Trust and Pacific Premier Bank offer the expertise and support to help you navigate both. 

For further assistance or to learn more about how a 1031 exchange might benefit your specific situation, contact Teddy Marks, VP Business Development, at 303.658.3014, Monday - Friday, 7:00 a.m. - 5:00 p.m. MT.

About Pacific Premier Trust
Pacific Premier Trust, a division of Pacific Premier Bank, is a pioneer in helping investors’ utilization of retirement account funds for real estate, private equity, and other non-exchange traded assets. As the trusted directed-custodian of over $18 billion in assets across 35,000 client accounts, Pacific Premier Trust works with financial institutions, capital raisers, financial advisors, and self-directed investors who elect to leverage tax-advantaged retirement funds in alternative investments. We deliver flexible custodial solutions ensuring a seamless client experience and unparalleled access to private markets, supported by the strength of Pacific Premier Bank. Contact us to learn more.

Legal Disclosure

Pacific Premier Trust performs the duties of an independent custodian of assets for self-directed individual and business retirement accounts and does not provide investment advice, sell investments or offer any tax or legal advice. Any communication made by Pacific Premier Trust with regard to opening or using a self-directed individual and business retirement account shall not be construed as a recommendation, call to action, or investment strategy to establish a particular account type. Clients or potential clients are in no way obligated to purchase services from Pacific Premier Trust and are free to purchase such services from any custodian they deem appropriate. Clients or potential clients are advised to perform their own due diligence in choosing any investment opportunity as well as consulting with a legal, tax and/or financial professional to assist them with an investment opportunity. Any information communicated by Pacific Premier Trust is for informational and educational purposes only. Alternative investments are not FDIC insured and are subject to risk, including loss of principal. Pacific Premier Trust is not affiliated with any financial professional, investment sponsor, or investment, tax or legal advisor.

This presentation may contain “forward-looking statements.”  Forward-looking statements may include information concerning future strategic objectives, business prospects, financial results, industry or market conditions or general economic conditions, among others. In addition, words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “forecasts,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Forward-looking statements are not guarantees, and they involve risks, uncertainties, and assumptions. Although such statements are based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from those expressed in the forward-looking statements. Pacific Premier Trust expressly disclaims any obligation to update any forward-looking statement in the event it later turns out to be inaccurate, whether as a result of new information, future events or otherwise.