WHAT DO WE DO? We provide qualified intermediary services and accommodation titleholder services. Acting under Treasury Reg. Sct. 1.1031 (k) - 1 (g) (4), we facilitate the disposition of investment and business properties for other like-kind properties, most often in a deferred exchange transaction. We: (1) provide the exchange documentation, (2) coordinate with the closing attorneys and/or title companies to establish the sale as a disposition of Relinquished Property and the purchase as an acquisition of Replacement Property, (3) receive into escrow the exchange proceeds from settlement, (4) apply the escrow funds to the subsequent settlements, and (5) coordinate with the client and the client's tax-preparer. The client thus defers recognition of capital gain on the sale of investment property and as a result can acquire more property with 'before-tax dollars' that it would have with 'after-tax dollars'. We do not give legal advice or tax advice. The client should consult a tax advisor or an attorney experienced in exchange transactions on any tax law issues. EXCHANGE FEES: Our fee for services in a forward exchange (sell first, then purchase) is typically in the range of $800 - $1,000. The fee is paid at the first settlement, and is determined by the number and type of settlements to be attended, and the locations of same. A reverse exchange has higher fees, typically, in the range of $1,500 - $1,800, half to be paid at the first settlement, the balance at the second settlement. For the simplest exchange transaction, the $800 fee is based on two settlements (one to sell, one to purchase), each settlement conducted in the Wilmington, DE area, or if out of the area, by courier and wire transfer, and each settlement being a direct deeding from seller to purchaser. More complicated transactions, such as additional settlements, multiple disbursements, or consultations will result in supplementary fees. Other circumstances, such as travel beyond the Wilmington area, escrow accounts with banks other than the Wilmington Trust Company, or other special factors, will result in additional mutually agreed upon charges. SCHEDULING AND PREPARATION TIME: Two weeks notice, with all information supplied as requested, is typically adequate, subject to calendaring issues. ‘Rush’ requests, if they can be accommodated, will be at a premium rate. EXCHANGE ESCROW: Our clients receive all interest earned on their escrow account. Because of our extensive escrow management relationship with the Wilmington Trust Company, there are no charges to our clients for Money Market escrow transactions. If you desire an exchange escrow to be held at another finanial institution, speak with us about our fee for that service. ENGAGEMENT FEE: An engagement fee is required to commence services - $250 for a forward exchange, $500 for a reverse exchange. THE EXCHANGE PROCESS: We assume that the client's transactions are under the direction of a tax or law counselor and will gladly coordinate with him or her, as appropriate. In an forward exchange (sell first, then purchase), our role will be to enter into an Exchange Agreement, under which the client will proceed normally to obtain buyers for its properties, inserting a clause in each contract indicating its intention to conclude the transaction as a tax-deferred exchange. Then the client will assign the contracts to us so that at settlement, we will execute the settlement sheets and will receive into escrow the net proceeds. Typically, the properties will be deeded directly to the buyers. Next, the client will proceed normally to find replacement properties, inserting into the contracts a clause indicating its intention to conclude the transactions as tax-deferred exchanges. Then the client will assign those contracts to us so that at settlement. We will execute the settlement sheets and will apply toward the purchases the net proceeds from escrow. Typically, the properties will be deeded directly from the sellers. If appropriate, we can arrange a reverse exchange. This transaction differs from the simpler forward exchange in that the client will be acquiring a replacement property before selling a relinquished property. To accomplish a reverse exchange, prior to your taking title to the Replacement Proeprty, you wil transfer to us the deed to the Relinquished Proprety, which we will hold while you market it. Once you have obtained a contract of sale for the Relinquished Property, we will proceed to settlement normally, However, at settlement, as your accommodation titleholder, we will deed the proprety to the purchaser. It should be possible for you to avoid paying transfer taxes on the transfer to us by having your counsel file an affidavit declaring the transfer as a straw-party type. ONLY FOR A REVERSE EXCHANGE, we require that an LLC be set up in which we will hold title to your property. Because, under the IRS rules, you cannot simultaneously own both the property you will be selling and the property which you are acquiring, we become the titleholder for one or the other. Have your attorney or your accountant establish the LLC entity for you. After the exchange has been completed, control of the LLC will be transferred to you or you can discard the entity. Questions/Consultations: We will gladly answer questions at any time about this process and the client's status in it; this is part of our service. However, we reserve the right to charge at our consulting rate of $250 for more involved discussions, such as assisting a client and the client's advisors in matters of tax-planning, research, etc.