A 1031 tax deferred exchange is a process in which property is treated as traded, or “exchanged”, for other property, thus deferring taxation on the profit until later. The net proceeds from the sale are escrowed with a Qualified Intermediary (Q.I.) and then disbursed at the exchange closing, when the exchange property is purchased.
The Q.I. is crucial: If the sale proceeds come in contact with the seller the exchange is off. In addition, there are time limits to locating the exchange property and closing the sale.
Hatcher Title & Escrow Agency uses Old Republic Exchange Corporation, the exchange arm of our title underwriter Old Republic Title, as the Q.I. for our 1031 tax deferred exchanges.