Tax-Deferred Money Secure With Starker Services
As the largest independently-owned national Qualified Intermediary, Starker Services has been entrusted with tens of thousands of exchanges. All financial institutions used by Starker Services meet established and stringent standards. Regardless of which bank is used, written procedures require the following:
During an exchange, you as the client (Exchangor) cannot have receipt of the cash proceeds without paying taxes on cash received. Unfortunately, whether an Exchangor has actual receipt or “constructive” receipt does not matter. It is still taxable. The dilemma facing investors is trying to satisfy the requirements of the §1031 Tax Code while obtaining maximum protection for the exchange funds.
Since no current standards exist within the industry, it is important to know how the Exchange Intermediary handles your funds. Starker Services holds the cash proceeds in a manner that provides Exchangors with the highest level of security, while complying with the requirements of the US Tax Code.
After closing on the sale of the Relinquished Property, the net proceeds are transferred to a special exchange account. One of the most important security devices is the financial stability of the institution where funds are held. Funds must be held in a bank that is both secure and familiar with correct procedures for tax deferral.
“Clients funds are put into separate savings account for each client’s exchange, “reports Jeff Whalen, Senior Vice President with Bridge Bank. Mr. Whalen states, “Funds can only be removed from the Bank in two ways: 1) wiring to an escrow in favor of the Exchangor to purchase the replacement property; or 2) Wiring or sending a check to the Exchangor in the event the exchange is canceled.”
Founded in 1952 with $1.3 trillion in assets, Wells Fargo Bank has a long established relationship with Starker Services. Starker Services, Inc. has numerous other banking relationships throughout the nation. If an Exchangor indicates a preference for a particular banking institution, Starker Services may coordinate with that bank to set up an exchange account. Custom Banking Solutions – If the Exchangor decides to open a custom account there will be a set up fee of $500.00 per account.
For the ultimate protection Starker Services offers a Qualified Escrow Account. The bank requires a notarized signature on the Qualified Escrow Agreement signed by all Exchangors. This agreement will serve as the signature card for the account. When the funds are ready to be wired, the bank will require the Exchangors' signatures along with two corporate officers' of Starker Services, Inc.
For more information on the security of funds in tax deferred exchanges, contact Starker Services, Inc. at 800-332-1031.Click here for a list of Banks Starker Services uses.