Leveraging Technology in a 1031 Exchange

Executing a 1031 exchange properly can range from the simple to the complex depending on a variety of issues such as property type, property use, vesting and so on. To this day, however, the vast majority of Qualified Intermediaries processing 1031 tax deferred exchanges still rely on either a paper-based system or title software modified to attempt to fit the needs of a 1031 exchange workflow. Not only do these antiquated ways of processing exchanges open customers and companies to the risk of error and broken exchanges, but also reduces efficiencies and the overall customer experience.

Accruit, as a nationally recognized Qualified A person acting to facilitate an exchange under section 1031 and the regulations. This person may not be the taxpayer or a disqualified person. Section 1.1031(k)-1(g)(4)(iii) requires that, for an intermediary to be a qualified intermediary, the intermediary must enter into a written "exchange" agreement with the taxpayer and, as required by the exchange agreement, acquire the relinquished property from the taxpayer, transfer the relinquished property, acquire the replacement property, and transfer the replacement property to the taxpayer. Intermediary and technology company, thinks of this differently.  Building on its over 20-year history in 1031 exchange technology, Accruit developed and patented Exchange Manager Pro℠ (EMP) software initially as an internal 1031 exchange processing software to gain efficiencies, create internal controls, increase security and drive the customer experience higher.   

• Efficiencies: It is estimated that Exchange Manager Pro℠ from Accruit can increase the number of exchanges processed per person by 2-3x a paper-based system.
• Internal Controls: Exchange Manager Pro℠ is built on a 1031 exchange rules-based system with wizards to help client service professionals process exchanges without constant oversight and feedback.
• Security: The cloud-based software increases security through two-factor authentication, document retention and electronic signature capture.
• Customer Experience: Users of Exchange Manager Pro℠ are capable of spending more time working with clients and less time with administrative tasks. The technology helped propel Accruit to the highest customer service score in the industry as measured by Net Promoter Scores (NPS).

Exchange Manager Pro℠ is now available externally to Title Companies, Qualified Intermediaries, Banks, Attorneys and others through Accruit’s Managed Service platform. 1031 Managed Services clients can take advantage of either the 1031 exchange automation or licensing EMP as a 1031 software application depending on their unique needs.

Software automation clients can take advantage of the increased efficiencies of Exchange Manager Pro℠ coupled with the depth of knowledge of Accruit. For example, a title company may wish to monetize their 1031 tax exchange volume, but do not want to invest in the resources and legal requirements to build their own Qualified  A person acting to facilitate an exchange under section 1031 and the regulations. This person may not be the taxpayer or a disqualified person. Section 1.1031(k)-1(g)(4)(iii) requires that, for an intermediary to be a qualified intermediary, the intermediary must enter into a written "exchange" agreement with the taxpayer and, as required by the exchange agreement, acquire the relinquished property from the taxpayer, transfer the relinquished property, acquire the replacement property, and transfer the replacement property to the taxpayer. Intermediary . Through EMP software automation, that title company can now upload necessary documents and information easily through the cloud and allow Accruit and Exchange Manager Pro℠ to process the exchange while they focus on the client and enjoy the added revenue of a new business line.

Software as a Service (SaaS) clients license the software and are able to leverage it to power their exchange operations. These customers tend to already be a Qualified A person acting to facilitate an exchange under section 1031 and the regulations. This person may not be the taxpayer or a disqualified person. Section 1.1031(k)-1(g)(4)(iii) requires that, for an intermediary to be a qualified intermediary, the intermediary must enter into a written "exchange" agreement with the taxpayer and, as required by the exchange agreement, acquire the relinquished property from the taxpayer, transfer the relinquished property, acquire the replacement property, and transfer the replacement property to the taxpayer. Intermediary and are looking for the software to increase efficiencies, embed controls and security and increase the customer experience.

If you are interested in learning more about Exchange Manager Pro℠ or Accruit’s Managed Services platform contact us at info@accruit.com or (800) 237-1031 today!