Ilyce Glink's Blog

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1031 Exchange Questions You Should Ask

If you're doing 1031 tax exchanges, you'll want to make sure that your funds are safe. You don't want to wake up to find out that some guy skimmed $100 million of taxpayer funds and yours are part of it.

Here are the questions you should ask to make sure your 1031 Exchange company is a good one, courtesy of Scott Nathanson, senior vice president of Nationwide Exchange Services, a 1031 exchange company that is Sarbanes-Oxley Section 404 compliant:

1. Where will my funds be held and how will they be held? (The right answer is an FDIC-insured bank in an escrow trust account.)

2. Does the 1031 exchange company have a fidelity bond and can you get a copy? (NES carries a $55 million fidelity bond for customer's protection.)

3. Does the 1031 exchange company have errors and omissions insurance? (The company should carry a separate E&O policy on each exchange.)

By the way, I'm not recommending that you use NES. You should make your own decisions and find a company that suits your needs. But the right answers to these questions will help keep you safe.

Labels: Clark Howard, WSB

posted by Ilyce Glink at 1:32 PM 0 comments

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