Bonded and Insured I.R.C. 1031 Qualified Intermediary

HOMESTEAD ESCROW & EXCHANGE COMPANY

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Exchange Procedure

Exchange Identification Requirements

• Three Property Identification Rule
• 200% of Fair Market Value Identification Rule
• 95% Exception to Identification Rule

Timing

There are specific and mandatory Exchange timeframes and deadlines that must be followed.

• Identification Period
• Exchange Period
• Taking Title

Benefits of a 1031 Tax Deferred Exchange

Taxpayers can avoid capital gains taxes until an exchanged property is sold and cash proceeds are received. Proceeds that would ordinarily be paid to the government in the form of taxes are preserved and utilized to achieve higher levels of income and asset appreciation.

Reasons to exchange include:

• The ability to exchange into assets with an opportunity for greater cash flow.
• Relocation of assets anywhere within the United States.
• Diversification or consolidation of a portfolio.
• Heirs may receive a "stepped-up" basis for inherited properties.

Type of Exchanges

An exchange or sale of property generally results in the recognition of a gain or loss. No gain or loss is recognized if property that is held for productive use in a trade or business is exchanged solely for property of a like-kind.

Exchanges can be classified as:

• Reverse 1031 Exchanges
• Forward 1031 Exchanges
• Personal Property Exchanges
• Delayed 1031 Exchanges
• Build-to-Suit Exchanges

Any asset held for productive use in a trade or business, or held for investment, may be exchanged for a like-kind asset that will also be held for productive use in a trade or business, or held for reinvestment.

Homestead Escrow and Exchange Company

An exchanger must be particularly aware when selecting a 1031 Qualified Intermediary before going into the transaction. Their chosen Qualified Intermediary must have the necessary knowledge, insurance, financial backing, bonding, transactional structure, and internal safety controls for the safe completion of the 1031 "like-kind" exchange transaction.

Homestead Escrow and Exchange Company:

• Member Federation of Exchange Accommodators (FEA)
• Fidelity Bonded to $1,000,000
• Commercial Crime Insurance Policy
• Errors and Omissions Insurance to $1,000,000
• All Funds Held in FDIC Insured Account

HEEC is a financially secure 1031 Exchange Intermediary with the financial strength, resources, safeguards, and financial backing that is critical for the safe completion of your 1031 "like-kind" exchange transaction.