Escrow & Title

In a Utah 1031 exchange, the exchange intermediary (qualified intermediary) must be:

AA licensed Utah real estate broker

BA neutral third party who is not the taxpayer's agent, relative, or recent business associate✓ Correct

CAn IRS-approved exchange facilitator

DA licensed title company in Utah

Explanation

IRS regulations require that a 1031 exchange use a Qualified Intermediary (QI) who is not related to the taxpayer (by blood, business relationship within 2 years, or as a current agent). The QI holds exchange proceeds and facilitates the transaction to defer capital gains.

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Key Terms to Know

1031 Exchange

A tax-deferred exchange allowing investors to sell one investment property and reinvest proceeds in a like-kind property while deferring capital gains taxes.

Right of First Refusal

A contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Easement

A non-possessory right to use another person's land for a specific purpose.