One-Stop Shop For Like-Kind Exchanges Can Provide Financing, QI Services
Author: John Ensminger.
Source: Volume 20, Number 04, March/April 2007 , pp.52-54(3)
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Abstract:
A finance company, AlphaCo, loans money to its customers to acquire replacement properties in like-kind exchanges, including exchanges in which BetaCo, a related party to AlphaCo, serves as a qualified intermediary (QI). The question posed in PLR 200630005, was whether AlphaCo’s selling, or offering to sell, properties it owns as replacement properties to customers of BetaCo in like-kind exchanges results in either AlphaCo or BetaCo being treated as a disqualified person as to those customers. The ruling concludes that in these circumstances, neither AlphaCo nor BetaCo is an agent of a customer using their services in a like-kind exchange. Also AlphaCo’s making of loans to customers, including loans to finance the acquisition of replacement property in like-kind exchanges, where BetaCo is the qualified intermediary, constitutes routine financial services.Keywords:
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