A Qualified Intermediary refers to someone who acts as a qualified intermediary on a particular portion of the U.S. Internal Revenue Code (IRC) to perform certain activities.
Video Qualified intermediary
IRC_.C2.A71031_Qualified_Intermediary "> IRC Ã,§1031 Qualified Intermediate
A §1031 Qualified Intermediary (QI), also known as Acceptors, is a company that facilitates Internal Revenue Code 1031 on deferred tax rate. The role of QI is defined in Treas. Reg. Ã,§1.1031 (k) -1 (g) (4). Under IRC Section 1031, the owner of a business property or investment may redeem the property with other similar properties within the period required by law, and suspend the recognition of current profits on the sale of the old property.
Anyone associated with a taxpayer, or who has had a financial relationship with the taxpayer (other than providing routine financial services) within two years before the closing of the exchange escrow can not function as QI (including employees), unless the service is a "means of payment for taxpayer in connection with the exchange of property intended to qualify for not recognizing gains or losses under section 1031 ". This means that the taxpayer can only use his lawyer, accountant, investment banker, broker or real estate agent currently in exceptional circumstances. QI must be bound and insured against errors and omissions. Relevant educational backgrounds such as tax, law or finance are desirable. Nevada is the only country that needs QI to be licensed.
QI signs a written agreement with the taxpayer where QI transfers the property that is released to the buyer, and transfers the replacement property to the taxpayer in accordance with the exchange agreement. QI holds the proceeds from the sale of the property released in the trust or escrow account to ensure the Taxpayer does not have actual or constructive receipt of proceeds from the sale.
When choosing a Qualified Intermediary (QI), it is important to consider the fact that there are few rules governing these entities. Therefore, performing due diligence is essential to ensure exchange funds are secured in a secure manner and Exchanger funds (individual deferral tax/entity via 1031 Exchange) are protected in the event that Qualified Brokers can not provide funds at closing. In addition, it is important to ensure that QIs are used to experience and understand the tax code thoroughly. Because doing this due diligence can take some time, SimpliDeferred is a company that lists Quality Hacks that have been reviewed before and provides insight to each QI company. So, each Exchanger can compare QI and can be assured that the selected QI will be able to facilitate their 1031 Exchange.
Maps Qualified intermediary
IRCP IRC Ã,§1441 Qualified Intermediate
IRC Ã,§1441 et seq. arranging income tax withheld from US payments made to non-U.S. persons. Generally, a US payer must verify the Tax Identification Number (TIN) of its payee and hold 30% of this payment if TIN is not displayed. A §1441 Qualified Intermediary (QI) is generally a foreign bank or other foreign financial institution signing an agreement with the Internal Revenue Service (IRS). Under the agreement, QI maintains its own records of the US or the overseas status of the beneficial owner of the payment and may take responsibility for income reporting and withholding tax. The QI Agreement is valid for 6 years and the QI entity is subject to the IRS or external audit periodically to confirm compliance with the terms of the agreement. The QI Regime §1441 is then supplemented by foreign account reporting requirements under the Foreign Account Tax Compliance Act.
See also
- 1031 Internal Revenue Code
- Straw man (law)
External links
- [1]
- What is a Qualified Intermediary?
- The Role of a Qualified Intermediary
- The Tanner-White PlLC Planner for Qualified Fiduciary Intermediary Ditches.
References
Source of the article : Wikipedia
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