The key element in a successful exchange is that the taxpayer is not, at any time, in receipt of any portion of the funds from the sale of the relinquished property, otherwise, the exchange fails. Prior to 1984, the buyer of the relinquished property would hold on to the funds until the seller found a replacement property.  If for any reason, whether it was bankruptcy or judgments or simply buyer's remorse, the buyer did not have access to the funds at the time the seller needed them, it created a very large problem for the seller to be able to complete their exchange. As a result, a safe harbor for the taxpayer was created within the regulations, and the role of the qualified intermediary was born. Now, instead of transacting directly with one another directly, all parties buy and sell via the QI.

In the most technical sense, a QI is a person or entity acting to facilitate an exchange under section 1031 and the regulations. This person may not be the taxpayer or a disqualified person . Section 1.1031(k)-1(g)(4)(iii) requires that, for an intermediary to be "qualified", the intermediary must enter into a written exchange agreement with the taxpayer and, as required by the exchange agreement, acquire the relinquished property from the taxpayer, transfer the relinquished property, acquire the replacement property, and transfer the replacement property to the taxpayer. In plain English, the QI acts as the buyer of the relinquished property and seller of the replacement property with the exchanger, which is what creates the exchange part of the transaction. The QI also holds the funds from the sale of the relinquished property until it is time to purchase the replacement property, thereby meeting the requirement that the seller not have receipt of funds during the exchange period. At Accruit, we hold all funds in segregated accounts, so you can rest assured that your funds will not be comingled with anyone else's. Additional responsibilities of the QI include: 

• Structuring the exchange
• Preparing the related documentation
• Safeguarding proceeds from the sale of the relinquished property(s)
• Continuous monitoring and advising to ensure compliance with federal and state 1031 and QI requirements

How long has the exchange company been actively engaged in the exchange industry?

Accruit and its subsidiaries have been actively involved in real estate, trust administration and 1031 exchange transactions since 1978. Accruit’s executive team and experienced client service representatives can cumulatively claim nearly two centuries in the 1031 exchange business.

How many employees of the company are Certified Exchange Specialists® (CES), a designation developed by the FEA and obtained only after years of experience, qualification and testing?

Accruit has five Certified Exchange Specialists® on staff and more in training.

How does the company provide for the security of exchanger funds?

Accruit works with depositary banks uniquely situated to provide for the safety and security of exchanger funds. Accruit has the ability to provide dual signature accounts requiring exchanger approval before the movement of exchanger funds. It also has the ability to provide qualified trust and escrow accounts to further protect deposits.

Does the company maintain a fidelity bond and errors and omission coverage? Accruit meets all best practices and state regulatory requirements for fidelity bonds and errors and omission coverage.