A Brief Guide to Starting a 1031 Exchange

A Brief Guide to Starting a 1031 Exchange

A Brief Guide to Starting a 1031 Exchange

By: Juno Kenny

Some of the most common questions that we are asked as a Qualified Intermediary (QI) when speaking with potential clients are “How do we get started?” and “When is the best time to involve a QI?”. For everyone’s convenience, we have created a short guide to answer these questions and provide a roadmap for those looking to start an exchange.

When to Involve a QI

When selling an income property, it is crucial that the exchange is set up before the property is transferred.

We highly recommend that you reach out to Genesis Bank Exchange as soon as the sale contract has been fully executed so that we can begin preparation of the associated exchange documents and walk you through the exchange process. As a Qualified Intermediary our role is to provide you with information regarding the exchange process such as deadlines and exchange requirements, to prepare the necessary exchange documents, and to ensure that your exchange funds are secure.

Although it is not a requirement, it is strongly suggested that you consult with your legal and tax advisors to ensure that a 1031 exchange is best for your specific circumstances before beginning the exchange process. While we are more than happy to answer any questions that you may have regarding your exchange, Genesis Bank Exchange does not provide legal or tax advice as a Qualified Intermediary.

How Do We Get Started / Contacting Genesis Bank Exchange

Please feel free to contact us either by phone or email. The contact information for the exchange division can be found at the bottom of this page.

Please keep in mind that the following information may be requested during your initial call.

  • Relinquished property address
  • Closing agent contact information (this may be an escrow agent, title agent, or attorney depending on the region)

The Exchange Process

  1. Following receipt of the above requested information, we will work with your closing agent to begin preparing your exchange documents and to facilitate the transfer of sale proceeds to your exchange account.
  2. Upon the closing date of the relinquished property, the 45-day identification period begins along with the 180-day exchange period. For more information on how to properly identify replacement property, please click here.
  3. Once a replacement property has been properly identified and a sale contract has been fully executed, we will begin a similar process as before. However, this time we will be facilitating the transfer of exchange funds for the purchase of your replacement property.

Industry Partners Looking to Refer Clients

For those looking to refer their clients to Genesis Bank Exchange, we ask that you please contact us via phone or email and provide the following information.

  • Relinquished Property Address
  • Contact information (phone number, email)
    • Client
    • Closing agent
    • Any associated advisors

Once received, we will typically schedule a short call with your client to introduce ourselves, explain the general rules of a 1031 exchange, and answer any questions that they may have. From there the exchange process is identical to what is shown above.

Summary Overview

In summary, the checklist below should give any prospective exchangers a general idea of what is needed when structuring a sale as a 1031 exchange.

  • Make sure that a 1031 cooperation clause is included in the sale contract.
  • Contact Genesis Bank Exchange once you have a fully executed sale contract for your relinquished property.
  • Seek the advice of your legal and tax advisors to confirm that a 1031 exchange is the best option for you.
  • Execute your exchange documents prior to the sale of your relinquished property.
  • Identify potential replacement properties within the 45-day identification period.
  • Contact Genesis Bank Exchange once you have a fully executed sale contract for your replacement property.
  • Execute your exchange documents prior to the purchase of your replacement property.
  • The exchange is complete following either (a) the receipt of all identified replacement property, or (b) the expiration of your exchange period.

Contact Information for the Genesis Bank Exchange Division:

Phone – 800.797.1031

Email – exchange@mygenesisbank.com

The materials and content provided on this website are for general informational purposes only. These materials and content do not, and are not intended to, constitute legal, tax, or financial advice.

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