Exchanges represent a legal tax deferral strategy which allows investors and property owners the opportunity to move the equity from one investment to another.

The Internal Revenue Service has set forth strict guidelines with which to complete a qualified exchange within regulations issued by the United States Department of the Treasury. These regulations set forth two safe harbors for completing qualified exchange transactions. Those safe harbors are:

1. The utilization of a qualified intermediary, or
2. The utilization of a qualified escrow.

Although qualified intermediaries are common throughout the country, the aspect of utilizing qualified escrows through attorneys or title companies has largely been ignored as a viable alternative to using exchange intermediaries.

1031 Exchange Industry History
When tax deferred exchanging is mentioned in most conversations, the majority of us associate this aspect of deferring taxes to the rules which affect the sale of our personal residences. We know that under Internal Revenue rules, if we sell our home and replace it within twenty-four months, provided we buy a home of equal or greater value, we can defer the capital gain taxes we normally would owe.

Although the rules do provide for deferring taxes on personal residences under Section 1034 of the Internal Revenue Code, another section allows similar tax deferral treatment for all other property. This portion of the Code, known as Section 1031, despite being relatively unknown, actually has a very long history.

As a legal tax deferral strategy, Section 1031 exchanging has been utilized effectively since 1921. In the intervening years between 1921 and the late seventies, most exchanges involved the direct swapping of real estate parcels. These exchanges were the non-taxable result of individuals who had balanced the equities of their properties with others, and desired to trade their properties directly.

Because there was no taxable gain or loss reported on these transactions, (due to the simple exchanging of equity from one property to another), the Internal Revenue Service allowed the transactions to occur as non-taxable sales. Beyond the moving of equity from one property to another, the only remaining caveat applied universally by the IRS was that all transfers occur on the same day, i.e. simultaneously.

In the middle to late seventies a series of court decisions occurred in Oregon and California which would forever change the face of tax deferred exchanging. The cases involved members of the Starker family and resulted in the de facto approval in the western United States of delayed exchanging.

Since the Starker court decisions spurred an increase in exchanging activity, the Internal Revenue Service took steps to codify their approval of delayed exchanging within the Tax Act of 1984. This then allowed delayed exchanges to be transacted legally throughout the United States and set forth the opportunity for a new industry of exchange professionals, Qualified Intermediaries.

In 1991 additional regulations were approved by Congress which further clarified the logistics and opportunities in tax deferred exchanging. These regulations created Safe Harbor provisions for those professional companies who are able to assist individual taxpayers with their transactions and to qualify the transfers according to current tax law.

The GITDEC Corporate Mission
To provide the best technical expertise, exchange service and consultation to our clients together with expeditious performance and escrow / closing coordination.

GITDEC Corporate Priorities
To maintain a marketing driven orientation which maximizes our share in individual, regional and national markets,

To provide the highest level of service and expertise to our clients at a reasonable fee,

To establish a team of responsive and respected individuals, dedicated to our clients and the company's long term viability and profitability,

To expand in key markets nationally through licensing, acquisition, strategic alliance and individual company owned locations,

To solidify ourselves as the industry benchmark in service, expertise and profitability.

Corporate Offices
Chicago, Illinois

Exchange Documentation
In addition to handling deferred and simultaneous exchanges of all types, GITDEC is active in facilitating numerous other forms of exchanges including Improvement / Construction, Personal Property, Multi Asset, Reverse (several formats) and others.

Our standing policy requires expeditious turnaround of all exchange documentation. Once exchange information is received the documentation must go out the same day and if necessary, exchange agreements can be processed in less than thirty minutes.

Accounting and Finance
Accounting and Finance at GITDEC is a fully computerized and proprietary function.

All exchange related banking functions are handled through regional banks and institutions throughout the United States.

GITDEC pays a short-term investment rate on all exchange proceeds to the exchangor. Please call for the current short-term investment rate.

Our Marketing Strategy
Since GITDEC is a marketing driven company, the highest priority and attention is given to our marketing functions. Most marketing efforts are educationally oriented and revolve around the concept of constant and direct customer contact.

This is accomplished by consistently employing a Marketing Plan with a direct approach emphasis. In some form of educational setting, our representatives speak before real estate and trade groups daily. We have developed a series of seminars and programs which appeal to real estate, tax and legal professionals and showcase our exchanging background and technical expertise. We regularly cover topics ranging from The Future of Real Estate Brokerage, Living Trusts, Short Sales to other exchanging and tax Issues.