Bankers Exchange Services

When I select a qualified intermediary to handle my 1031 tax deferred exchange, what safeguards can I take to insure that my money will be safe in their hands? The answer to this question is an important one since your investment property equity can be a substantial part of your overall wealth. Most qualified intermediaries are reputable, honest and ethical, but like all businesses it only takes one or two making newspaper headlines to cast doubt on an entire industry.

Some of the questions that you ask a qualified intermediary before you make your choice should include the following:

1. Will my money be placed in a segregated account rather than a pooled account with other exchanger’s money? You want your funds placed in a separate account which is FDIC insured up to the legal limit per depositor rather than a pooled account which will contain all the combined funds from all of the exchange clients. You will want a separate account set up using your taxpayer ID number.

2. Does the QI carry a Fidelity Bond and E&O insurance? A fidelity bond helps cover the loss a QI may suffer due to a dishonest act by one of its Employees. Errors & Omission or professional liability insurance protects against claims that something was handled incorrectly. In both cases these types of insurance policies will go a long way in enabling the QI to have the resources to protect your money.

3. What kind of internal processes and audit controls does the QI have in place? Will you receive an account statement or have access to an online account? Bankers Exchange Services is wholly owned by Bay Commercial Bank with branches in the East Bay and Southern California. Because we are bank owned we fall under the very strict regulations that govern our bank.

4. What is the technical ability of the staff employed by the QI? You want to work with someone who can answer your questions in a clear and concise way and explain the process simply. Bankers Exchange Services has highly trained professionals to assist you, including two certified exchange specialists® and an advisory attorney on staff. With the help of your tax advisor we can guide you effortlessly through the process and save you thousands of tax dollars.

Remember there is no substitute for effective tax planning! We at Bankers Exchange Services are committed to helping you achieve your wealth building goals. If you have any questions or would like to discuss any aspect of a 1031 exchange give us a call at (877) 989-1031.

With the real estate market in what seems like a downward spiral the need for doing a 1031 Exchange may seem less necessary. Recent events in the 1031 industry have made investors more leery of entering into an exchange transaction. There are many factors to consider when contemplating an exchange. The first thing to do is seek the advice of a tax professional; the second is to check with a financial planner to ensure your investment portfolio is not to heavily weighted in any one type of investment. Once an investor feels confident that a 1031 Exchange is the correct investment strategy they must find an accommodator they can trust with their funds.

Questions to ask a potential Qualified Intermediary: Are they bonded? Do they carry errors and omissions insurance? Do they segregate exchange funds into separate trust accounts that are federally insured? If the answer to all of these questions is YES that is a good indication you will be dealing with a reputable industry professional.

For help with any of the aforementioned topics or any other exchange related questions give Bankers Exchange Services a call, we have several extremely qualified individuals on staff that would be more than happy to walk you through an exchange transaction from beginning to end. We always want our clients to feel at ease when doing an exchange. Client satisfaction is our number one priority.

For more information please contact Bankers Exchange Services at (877) 989-1031