Andrew F. Gelson and Thomas E. St. Jean are qualified intermediaries in a transaction that allows property owners to avoid paying capital gains tax by reinvesting the proceeds in another property. Gelson tells GlobeSt.com that the qualified intermediary is required by the IRS in order to make the transaction legitimate. Gelson says his locally based firm has an escrow account with Wachovia Securities for the proceeds, which must be used within 180 days. Gelson was general tax counsel and St. Jean was responsible for business development within the real estate industry at JP Morgan Property Exchange.
According to Gelson, the like-kind exchanges are much more popular on the West coast, but are being used more in this area as the availability of replacement properties are increasing. Specifically, he notes, the credit tenant lease arena is providing property owners with options such as free-standing CVSs and Walgreens that have long term leases with good credit tenants. Also tenant in common properties, in which a property is owned a by number of individuals is becoming done more frequently and offers property owners another option.
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