Who determines if an investor is accredite

[Jane S.]

I’m wondering if the IRS has anything to do with deciding who's an accredited investor or what agency does make the determination.

And if after all the work Can this be used to deny 1031 approval?

Also what % of 1031 exchanges get denied?

Thanks.

[Dave Foster]

@Jane S. Accreditation status has nothing to do with a 1031 exchange.  Anyone can do a 1031 exchange.  Some offerings are open only to accredited investors.  The SEC sets the requirements and securities brokers help you sort though that.  But that doesn't impact your 1031 exchange.

Most QI's and accountants are pretty good at helping investors determine their property's eligibility for a 1031 exchange.  The vast vast vast % of 1031 exchanges complete never have any issues.  They are only denied if you are audited for some other reason and they look at the structure of your 1031 and decide you did not do it the right way.