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1031 Exchange

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Permissible and Non-Permissible 1031 Exchange Selling Expenses

Expenses associated with the sale or disposition of the relinquished property can be paid for by 1031 Exchange profits; however, if said 1031 Exchange profits are used to pay for items that are not qualified under IRS guidelines, including operating costs, lender-related charges and so on, some income tax liability will be incurred by the Investor. Estimated closing costs and settlement expenses should always be reviewed with the Investor’s accountant before being approved to be sure that all IRS guidelines for tax deferment are being adhered to properly.

Following is a list of invalid 1031 Exchange expenses, costs, and charges that are not allowed by the IRS:

  • Non-Permissible Operating Expenses, Financing and Closing Costs:
  • Financing or lender costs such as loan fees, loan points, appraisal fees, mortgage insurance premiums, lender's title insurance policy premiums, and other loan processing fees and costs
  • Prorated Property taxes
  • Prorated rents
  • Insurance premium payments
  • Security deposits
  • Payoff of credit card balances
  • Repairs and/or maintenance costs

Following is a list of valid 1031 Exchange expenses, costs, and charges that are allowed by the IRS:

  • Owner's title insurance premiums
  • Escrow agent, settlement agent or closing attorney fees
  • Real estate broker's commissions
  • Finder fees or referral fees
  • 1031 Exchange Qualified Intermediary fees
  • Documentary transfer taxes
  • Recording or filing fees
  • Attorney fees and costs related to the disposition or acquisition
  • Tax advisor fees related to the disposition or acquisition

Disclaimer: 1031 exchange made simple does not guarantee the performance of the QI's in our referral network and we can not be held liable for any misrepresentations or mistakes in regards to a 1031 exchange by one of the QI's that we refer to you. 1031 Exchange made simple does not provide tax advice nor can we make representations regarding the tax consequences of an exchange transaction. 1031 Exchange made simple is a 1031 QI Referral Network. 1031 made simple is not responsible (in any way) for the performance, creditability, and financial condition of any QI in our network. In this new economic environment it is imperative that all potential 1031 exchange customers do their own due diligence and research on any QI that they may use, on a 1031 exchange. Please verify and check the validity of the Bonding and Insurance of your QI. It may be wise to have your 1031 exchange accounts set up as separate, individual customer accounts. Our web site is to be used as a information based web site only. All parties doing a 1031 exchange must consult their tax advisors or attorney for this information.

If you are in need of a qualified intermediary and would like to be matched up with one of our fully licensed and bonded QI's in your state, please call 1-877-812-1031

If you are a fully licensed Qualified Intermediary and would like to be evaluated and possibly added to our network of QI state and local providers, please call us today at: 1-877-812-1031

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Unless expressly stated otherwise on this website, (1) nothing contained in this website was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended; (2) any written statement contained on this website relating to any federal tax transaction or matter may not be used by any person to support the promotion or marketing or to recommend any federal tax transaction or matter; and (3) any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor with respect to any federal tax transaction or matter contained in this website. No one, without our express written permission, may use any part of this website in promoting, marketing or recommending an arrangement relating to any federal tax matter to one or more taxpayers.

1031 Exchange Made Simple
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Phone: 1- (877) 812-1031 (Calls go to an FEA Member)
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