First Exchange Company FAQ's
Q: What is a 1031 Exchange?
A: It is the exchange of property for the same kind of property, which MUST be:
- Like kind property, and
- Qualifying property.
Q: What is Like Kind?
A: Real estate for real estate. Example: The exchange of rental property in Ohio for vacant land in Arizona.
Q: What is Qualified Property?
A: Both the property you give up and the property you receive MUST be held by you for business or investment.
Q: What is a Qualified Intermediary?
A: An entity that enters into a written Exchange Agreement with you to acquire and transfer the property you give up and to acquire the replacement property and transfer it to you. The Exchange Agreement MUST expressly limit your rights to the money or other property during the interim.
Q: What are the benefits of a deferred exchange?
- Preserve assets
- Maximize investment potential
- Safely transfer equity
- Defer taxes on gain
Q: What are the critical elements of a deferred exchange?
- You must sign and return the Exchange Agreement to First American Exchange Company, your Qualified Intermediary, BEFORE the closing of the property you are giving up, also known as the Relinquished Property.
- The seller or selling entity of the Relinquished Property MUST be the buyer of the property received, also known as the Replacement property.
- The Replacement Property MUST be unambiguously identified ON OR BEFORE the 45th day after the closing of the first Relinquished Property. This interim period is referred to as the 45th-day identification time period.
- The allowable time period between the closing of the Relinquished Property and at least one of the identified Replacement Properties, commonly referred to as the Exchange period, is the EARLIER OF:
- The 180th day after the date of closing on the Relinquished Property, OR
The due date, including extensions, for your federal income tax return for the tax year in which the closing of the first Relinquished Property occurs. Example: John and Mary Smith's first Relinquished Property closing was December 15, 1995, and their Replacement Property MUST close on or before April 15, 1996, unless they file for an extension; then the closing must be on or before June 12, 1996.
Q: How safe is my money?
A: The money received by First American Exchange Company will be deposited into a separate Qualified Escrow Trust Account and invested at your direction.
Q: Who earns the interest?
A: You do! Please call First American Exchange Company for details.
Q: Is my money guaranteed?
A: Yes! Through First American Exchange Company's unique affiliation with First American Title, you will receive an Exchange Closing Protection Letter, providing you with security and peace of mind.
Q: How secure is First American Exchange Company?
A: First American Exchange Company is a wholly owned subsidiary of First American Title Insurance Company and is able to combine a unique service with the financial strength of the nation's preeminent title insurance organization. For more information on First American Title's strength, visit the Web site of parent company, First American Financial Corporation
Q: Where are the offices located?
A: In Phoenix, at 4801 East Washington, Suite 240, Phoenix, Arizona 85034. Phone toll free (800) 337-1031, (602) 685-7262, fax (866) 282-9123.