Freedman Consulting

Tax Deferred Exchange Specialists.


Who We Are

Freedman Consulting provides advisory, consulting, buyer representation, and mortgage brokerage services to the 1031 exchanger and 1033 (involuntary conversion) buyer. Our approach is proactive. We specialize in risk minimization, strategic structuring, maximizing after-tax return on equity and estate planning. We rely on a financial management rate of return model designed specifically for the redeployment of equity in 1031 & 1033 transactions. Our clients are typically replacing equity between $3,000,000 and $30,000,000.

Freedman Consulting has advised, consulted, or closed on more than $1 Billion of exchange transactions. We have been in the 1031/net-leased property business for over 16 years, and are happy to provide references.

Our Services

Freedman Consulting offers a complete program that allows our clients to move quickly and aggressively to meet the strict timing requirements under Section 1031 and 1033. We add value to the exchange process by educating our clients, going to the replacement property marketplace nationwide, and by shopping the mortgage markets. We offer an efficient and professional transaction process for the 1031 and 1033 replacement property buyer.

We maintain a national network of developers, brokers, attorneys, accountants, qualified intermediaries, title company professionals, and lenders who specialize in 1031 and 1033 transactions. We often employ long-term, freestanding, retail, industrial, and office investment grade net-leased property for the replacement asset or assets. We offer unbiased, by-the-numbers, by-the-facts advice, using a sophisticated tax-deferred exchange computer model.

Our fee schedule is hourly-based, contingency-based, or project-based, depending upon the scope of services needed and requested by our clients or their accountants or attorneys.

What is a 1031 Exchange?

A Tax Deferred Exchange is a transaction in which a property owner trades one property for another while deferring the state income tax, the federal depreciation recapture tax and the capital gains tax on the transaction. In an ordinary sale transaction, the property owner is taxed on any gain realized from the sale of the property. However, in a 1031 exchange, the tax on the transaction is deferred. These exchanges are sometimes called "tax free exchanges" because the exchange transaction itself is not taxed.

In an exchange, a property owner disposes of one property and redeploys the equity and replaces or increases the debt while acquiring a like-kind replacement property. Today, a sale and a reinvestment in a replacement property are converted into an exchange by means of an exchange agreement and the services of a qualified intermediary - a third party who helps to ensure that the exchange is structured properly.

Tax deferred exchanges are authorized by Section 1031 of the Internal Revenue Code. The requirements of Section 1031 and other sections must be carefully met; when an exchange is done properly, the tax on the transaction is deferred.

Exchange Timeline

Timing must be proactively and carefully managed in a tax deferred exchange transaction. A property owner has 45 days from the sale of his or her relinquished property to identify the replacement property targets and 180 days from the sale date in which to close on the entire transaction.

Problem: 45 Days Is Not Enough Time to Effectively Handle the Identification Process.

A Prudent Buyer will complete the Due Diligence before Identifying Replacement Property.

What is 1033/Involuntary Conversion?

An Involuntary Conversion occurs when an owner's property is destroyed, stolen, condemned, or disposed of under the threat of condemnation and a taxpayer receives insurance proceeds or a condemnation award. Involuntary conversions are also called involuntary exchanges. To postpone reporting gain from a condemnation, the property owner must buy replacement property within a certain period of time.

The replacement period for a condemnation begins on the earlier of the following dates: the date on which you disposed of the condemned property or the date on which the threat of condemnation began. The replacement period ends 2 years after the end of the first tax year in which any part of the gain on the condemnation is realized.