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The information on this web site is only intended to provide a guide after consulting with your accountant and or tax attorney.
Exchange Corporation of Montana has no control over links from this web site and does not endorse
any external internet site that contains links or references. All links are intended for information only.
Copyright © 2010 by Exchange Corporation of Montana ( ECOM ) · All Rights Reserved · P.O. Box 11387 · Bozeman, Montana 59719 · 406.388.4764
Exchange Corporation of Montana has no control over links from this web site and does not endorse
any external internet site that contains links or references. All links are intended for information only.
Copyright © 2010 by Exchange Corporation of Montana ( ECOM ) · All Rights Reserved · P.O. Box 11387 · Bozeman, Montana 59719 · 406.388.4764
P.O. Box 11387 • Bozeman, Montana 59719 • 406.388.4764 • 800.579.1031 • Fax: 406.388.4784
It is important to note that the like-kind exchange is tax-deferred, not tax-free. A sale of
property and subsequent purchase of a replacement property doesn't work. There must
be an Exchange. The IRS issued "safe-harbor" Regulations in 1991, which established
approved procedures for exchanges. Regulations established procedures, which include
the use of an Intermediary, direct deeding, the use of qualified escrow accounts for
temporary holding of "exchange funds" and other procedures, which now have the
official blessing of the IRS. Therefore, it is desirable to structure exchanges so that they
can be in harmony with the 1991 Regulations.
See Exchange Parameters for more specific information on 1031 Exchange requirements.
Why is a Qualified Intermediary needed?
The exchange ends the moment the taxpayer has actual or constructive receipt (i.e.
direct or indirect use or control) of the proceeds from the sale of the relinquished
property. The use of a QI is a safe harbor established by the Treasury Regulations. If the
taxpayer meets the requirements of this safe harbor, the IRS will not consider the
taxpayer to be in receipt of the funds. The sale proceeds go directly to the QI, who holds
them until they are needed to acquire the replacement property. The QI then delivers the
funds directly to the closing agent.
What is a Qualified Intermediary (QI)?
A Qualified Intermediary is an independent party who facilitates tax-deferred exchanges
pursuant to Section 1031 of the Internal Revenue Code. The QI cannot be the taxpayer or
a disqualified person.
Acting under a written agreement with the taxpayer, the QI acquires the relinquished property and
transfers it to the buyer.
The QI holds the sales proceeds, to prevent the taxpayer from having actual or constructive receipt
of the funds.
Finally, the QI acquires the replacement property and transfers it to the taxpayer to complete the
exchange within the appropriate time limits.
Please contact us if we can be of any assistance in helping you in your property
exchanges.
Sharon Southard - ECOM President
A 1031 exchange, also known as a tax-deferred exchange, allows a taxpayer to sell investment property and defer tax payments on the gain by not recognizing any gain or loss if the taxpayer is reinvesting into a "like-kind" investment property or properties. This is accomplished by adhering to the regulations set forth in Section 1031 of the Internal Revenue Code. (IRS 1031 Fact Sheet - on site) | IRS Web Site for 1031's
Reduce or Elimanate Capital Gains Tax
Exchange Corporation of Montana (ECOM) was founded in 1996 by Judith A Byrd. Ms. Byrd had prior experience in starting and managing an IRC 1031 Exchange Division for a Corporation prior to her moving to Montana.
In 2005, Sharon Southard joined the company and also brought with her prior experience as an escrow
In 2005, Sharon Southard joined the company and also brought with her prior experience as an escrow
officer for a leader in the title insurance industry for Gallatin and Madison Counties in Montana. She also has other real estate related experience and a degree in management. All of these experiences made her the perfect candidate to take over the reins for ECOM when it came time for Judy Byrd to phase out of full time service.
Sharon Southard currently serves as President of ECOM.
Sharon Southard currently serves as President of ECOM.
Sharon Southard
