need a referral for a 1031 Exchange company

[Jack Gibson]

Has anyone found a good 1031 Exchange company that they can recommend?  Solid track record, dependability, trustworthiness, reasonable fees, etc. 

thank you!

[Dave Foster]

@Susan O., Lol,  I feel like I should say, "I'm in the room you know."  This is the thorniest of all issues because it hinges on one word - Intent.  And intent is what you say it is.  But intent is also demonstrated by your actions.  So, while there is no statutory holding period, it must be your intent to hold that property for productive use.  So how long is that???

Most conservative professionals, and the bulk of case law and issuing and clarification statements by the IRS would indicate that holding a property for over a year would qualify.  Meaning that if you held the property for a year that meant that you had demonstrated your "intent' to hold it for productive use.  The mantra used to be "a year and a day" because of three different tax court rulings that used some consistent language.  

But here's where is gets dicey - What if that property was for sale the entire time and it took a year to sell?  Was your intent to hold it for productive use or was it to resell?  If your intent was primarily to resell then no matter how long you hold it it would not qualify for 1031 treatment.  But the reverse is true as well.  If you bought a property with the intent to hold and several weeks later you find that it's horribly unsuited to your business model, or someone unsolicited offers you a ridiculous sum of money, or....any other reason that makes you change your intent and normal practice then that would qualify because your intent when you purchased it was to hold it.

1031s are not known to be an audit trigger.  But if you are audited you will be asked about it by a field agent who has less experience and knowledge of 1031 than you.  So you want to have a very strong explanation and demonstration of your intent - from actual hold periods, to demonstrated practice, to correspondance with your accountant and other professionals, etc etc.