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Sonoma Exchange Corporation offers exchange services at low cost. If you plan to sell appreciated real estate, you should consider a “tax-free” like-kind exchange as an alternative to a taxable sale. Real estate used in a trade or business, or held for investment may be exchanged “tax-free” for any other real estate that will be held for either of those purposes. Thus, improved realty may be exchanged for unimproved realty, and city real estate for farm or ranch property. Whether the exchange is simultaneous or delayed (sometimes referred to as “Starker”), the use of a qualified intermediary such as Sonoma Exchange Corporation (SEC) is encouraged by the Internal Revenue Service and is granted a “safe harbor” designation. |
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| This “safe harbor” allows the taxpayer to employ an independent facilitator, like SEC, to receive the relinquished property from the taxpayer, transfer it to the buyer, acquire the replacement property, and transfer it to the taxpayer. |
By utilizing the safe harbor rules, the possiblity of IRS challenge is minimized. SEC has transacted over 1000 exchanges without challenge from the IRS. |
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