First, what's a QI right?
Those two letters keep me employed. Functioning as a qualified intermediary is actually not a complicated process. However, educating clients on how to execute a 1031 exchange is a difficult undertaking. Most clients, attorneys, CPAs grasp the concept of capital gains. However, rolling out a marketing plan on alternative ways to redploy capital in a tax-efficient way is difficult.
This week was a good example of a cross-section of my activities:
I conducted a realtor seminar for McEnearney Real Estate in Washington, DC. McEnearney has long been a dominant player in Washington DC's Alexandria submarket. However, they recently opened a DC office and actually converted many agents from Long and Foster and Randall Hagner in that region.
Every 1031 seminar I have been to in years besides my own has a slide like this:
Now when looking at this slide can you figure out what a QI or 1031 is? Does it remind you of an Earth Science diagram from middle school?I have always simply described the process with a diagram of the "Old Property" Closing and the "New Property" Closing and showed the QI in-between the two. Usually that diagram suffices for the average person's understanding that we are literally the go-between, middleman, and they don't call us"intermediary" for nothing!
After the seminar at McEnearney, I taught a 1.5 hour Continuing Ed seminar at the Southern Maryland Association of Realtors. SMAR (as they are endearingly called) has a great platform with updated classes. I was impressed that 2/3 of the room had already done a 1031 in the past. Carolyn Guy, the moderator, had actually conducted a Reverse Exchange. This is where you Buy the New Property before you Sell your Old Property. It is fairly complex as you have to create an EAT (Exchange Accomodating Titleholder) to hold title to the New Property while you sell your Old Property.
Wednesday night turned to fun with the ICSC crowd. Jay Steele of Hirschler Fleischler was kind enough to take 14 of us out to eat at Washington, DC's Caucus Room. It was DC's Restaraunt Week so the place was packed; however, we had a private room. With our room filled with brokers, engineers, and attorneys was filled with the current war stories on operating in this unprecedented time. Thankfully, Jon Hipp of Calkain was still able to lighten the mood with his story of attending the Super Bowl and riding around Tampa in a Lamborghini in 2009. Obviously, there are bright spots in the Economy!
This morning I attended a great event by Accelerent. The event had hundreds of people. I was invited by John McManus of Virginia Commerce. The keynote speaker was Cynthia Cooper.
Ms. Cooper shared an awe-inspiring tale of how she dealt with the ethical dilemma of uncovering fraud in a corporate environment and blowing the whistle on her employee counterparts after discovering accounting fictions. This was a great tale of ethical dilemmas we all face.
Overall, these highlights set the tone. Under all this outbound stuff we still had to actually conduct business and service our clients. Its a tough juggling act sometimes. So I better go return some calls!
