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IX. CAN I RECEIVE SOME CASH FROM MY SALE AND REINVEST THE REST OF MY PROCEEDS TAX-FREE? Yes, in what is called a partially taxable exchange. The Exchangor must request, prior to the closing, that a certain portion of the proceeds be paid directly to him or her and not to the Intermediary .This will be accomplished by means of specific wording in the Assignment and Notice of Assignment, and instructions to the closing agent for the relinquished property. The Exchangor will incur capital gains taxes on direct payments from the first dollar, not in a pro-rata proportion. In other words, all direct payments (or "boot") are fully taxable, but only up to the amount of the gain realized on the sale. But the amount that is directed to the Intermediary for the exchange escrow account will still be allowed to be invested tax-free in replacement property. X. WHY SHOULD I USE 1031 EXCHANGE SERVICES, INC. AS THE QUALIFIED INTERMEDIARY FOR MY EXCHANGE? 1031 EXCHANGE SERVICES, INC., a member of the Federation of Exchange Accommodators, is a professionally-staffed and experienced Qualified Intermediary firm engaged solely in the business of facilitating Section 1031 Tax-Deferred Exchanges. The principals are Charles J. Ajootian, Esq., (Pres.) and Edward A. Ajootian, CPA (Vice Pres.), who have a combined total of over 48 years experience in real estate law and tax planning. Charles J. Ajootian has been a member of the R.I. bar for more than 26 years, and is a frequent speaker on the subject of tax-free exchanges, with presentations before the R.I. Society of Financial Planners, the R.I. Conveyancers Association, the R.I. Landlord Association, various Realtors Associations, and on behalf of the National Business Institute. In December, 1999, Mr. Ajootian's article "Handling the Tax-Deferred Sec. 1031 Exchange" was published in the Rhode Island Bar Journal. Together, the principals have facilitated hundreds of exchanges, from the simplest to the most complex, and constantly review the changing case law and IRS regulations to keep current with the best and most sophisticated exchange structures. 1031 EXCHANGE SERVICES, INC. takes pride in guiding investment property owners and their professional advisors safely and expertly through every step of "the last remaining tax shelter for investment real estate." (Please note that the within materials can be considered a valuable introduction to the area of Tax-Deferred Exchanges of Investment Real Estate, but should not be considered a substitute for a consultation with a reputable and experienced Qualified Intermediary, or with an Attorney or CPA knowledgeable in this field.)
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