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GITDEC | Safety of Your Funds During a 1031 Exchange |
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Q and A: FAQ's Glossary 1031 Exchange Basics: How and Why 1031: 1031 Documents: Samples: Corporate Information: Ask us about 1031 Company Information Webmaster |
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Whenever a taxpayer contemplates the use of a Qualified Intermediary in a tax deferred
exchange, he or she must realize that in most cases the Intermediary will be holding their
exchange proceeds. And often these proceeds (exchange equity) can amount to a significant
sum of money. Therefore, it is important to note the processes and logistics which have been established by your Intermediary to ensure the safety of your funds.
Where are Funds Held? Exchangor and Intermediary expressly agree that any cash proceeds received from the disposition of the relinquished property shall be held and invested in certificates of deposit, cash management, working capital or money market accounts, bankers acceptance or United States obligations in the discretion and through financial institutions of Intermediary. Said investment account shall be in the name of Intermediary and shall require the signature of an authorized officer of Intermediary to permit the withdrawal of any portion thereof. By the terms hereof, Intermediary shall only be required to participate in the withdrawal of funds when instructed by Exchangor and only when the instructions involve the acquisition of the replacement property or the disposition of said proceeds by Intermediary to Exchangor. |
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