Mid Atlantic Real Estate Journal — 1031 Exchange — March 15 - 28, 2013 — 17A



By Michael Hines, The Bancorp Inc. Importance of the Qualified Escrow Agreement Fidelity Bond or a Cash Let- ter of Credit? ·If not, do you provide a line access to the account. This provides full transpar- ency to the details of when Bank any of these questions, you will be undoubtedly pleased with the answer.


he two major responsi- bilities of the Qualified Intermediary (QI) are

bank operated by The Ban- corp Inc. and headquartered in Wilmington, DE. The Bancorp Bank delivers a full array of financial services and products, both directly and through hundreds of private-label affinity partner programs nationwide. Michael Hines is the 1st vice president of the 1031 Exchange Services Group at The Bancorp Bank and is a member of the board of directors for the Fed- eration of Exchange Ac- commodators. ■

to provide IRS compli- an t d o c u - ments; and to hold the E x c h a n g e funds in a safe, liquid, segregated account. Yet,

Our hands-on team of ex- perienced 1031 Exchange specialists offer unparalleled expertise in establishing Es- crow Accounts, along with hands-on customer service, competitive interest rates and most importantly a bank that understands the needs of the Qualified Intermediary. Behind our 1031 Exchange division is the stability of The Bancorp Bank, an FDIC-in- sured branchless commercial

The Bancorp Bank delivers a full array of finan- cial services and products, both directly and through hundreds of private-label affinity partner programs nationwide.

Qualified Escrow Agreement? ·Are your deposits held in a Segregated Escrow Account? You should also ask for the ability to view Exchange proceeds 24/7/365, via on-

funds were received, interest earned and the date of final disbursement. Unparalleled Expertise and Stability

Michael Hines

make no mistake: reputable QI service is not a commodity and using size, prestigious name, or association with an industry trade group is no longer enough to ensure the safety of your Exchange funds. In recent years, there have been a number of defal- cations, bankruptcies and business failures within the QI service industry; many among QIs that on the sur- face appeared to be reputa- ble. In response, a number of states includingWashington, Nevada, Idaho, California, Maine, Oregon and Colorado have passed legislation for the use of Qualified Escrow Agreements in lieu of Fidel- ity Bonds and Cash Letters of Credit. Why a Qualified Escrow Agreement? The Qualified Escrow Agreement defines the pro- cedures the Bank, the Inter- mediary and the Taxpayer agree upon to maintain and administer the Exchange proceeds. Withdrawals are strictly monitored by the Bank to comply with a Dis- bursement Request signed by both Taxpayer and Quali- fied Intermediary. This re- quest must list the amount, date, account number, wiring instructions for the outgo- ing funds and matching signatures from the original Qualified EscrowAgreement. If any of these items are not provided or signatures do not match, the request should be returned to the Intermedi- ary. Must-Ask QI Questions As a result of the afore- mentioned losses and State Regulations, be sure to ask any Exchange provider that you are considering the fol- lowing questions:

If you ask The Bancorp

Our 1031 I.Q. makes us the ideal partner to


1031 Exchanges can be complex, which is exactly why you need an Escrow Agent with critical know-how. Operating within one the nations leading online commercial banks, The Bancorp Bank, our specialists understand the unique needs of Q.I.s. Offering strategic partnership, superior service, and an unparalleled technology platform, we have the insight and the tools to make your job easier. As a client, you’ll have the peace-of-mind knowing that your transactions will be IRS compliant, competitive, and fully accessible 24/7/365 via online account access.

For your 1031 Exchange banking services, choose the experts.

Choose The Bancorp .

Christine Cataldi 215.861.7756 ccataldi@thebancorp.com

Michael J. Hines 215.861.7952 mhines@thebancorp.com


·Does your company have a

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