FIND Verified Professionals

California

Qualified Intermediaries

California 1031 Exchanges

When considering a 1031 exchange for a property located in California, there are a few unique aspects to keep in mind compared to other states in the U.S.:

  1. California Clawback Provision: One of the most significant differences is the California clawback provision. This rule requires that if you perform a 1031 exchange and replace a California property with a property located outside of California, you must file an annual information return with the California Franchise Tax Board (FTB) for the year in which the exchange is completed and each subsequent year until the replacement property is sold in a taxable transaction. This provision ensures that California can track and eventually tax the gain deferred in the exchange if it eventually becomes taxable.
  2. High State Tax Rate: California has one of the highest state income tax rates in the U.S. This makes the deferral of capital gains taxes through a 1031 exchange particularly advantageous for property owners in California. By deferring federal and state capital gains taxes, investors can significantly enhance their purchasing power when acquiring replacement properties.
  3. Active Real Estate Market: California's real estate market is one of the most active and dynamic in the country. This provides numerous opportunities for investors looking to engage in 1031 exchanges. However, it also means that competition for desirable properties can be intense, requiring investors to be well-prepared and quick to act when opportunities arise.
  4. Environmental and Regulatory Considerations: California has stringent environmental regulations and zoning laws that can affect real estate transactions, including 1031 exchanges. It's important to conduct thorough due diligence on potential replacement properties to ensure they meet all local and state requirements.
  5. Diverse Market Opportunities: California's diverse geography and economy offer a wide range of real estate investment opportunities, from urban properties in cities like Los Angeles and San Francisco to agricultural lands in the Central Valley and vacation properties along the coast. This diversity allows for strategic portfolio diversification through 1031 exchanges.

Navigating a 1031 exchange in California can be complex due to these unique factors, but with careful planning and the right guidance, it can also provide substantial benefits. Always consider consulting with a tax professional or a 1031 exchange accommodator to ensure compliance with all regulations and to make the most of your investment strategy.

California State Tax Information

The Combined Rate accounts for Federal, State, and Local tax rate on capital gains income, the 3.8 percent Surtax on capital gains and the marginal effect of Pease Limitations (which results in a tax rate increase of 1.18 percent).

Bracket levels adjusted for inflation each year. Release dates for tax bracket inflation adjustments vary by state and may fall after the end of the applicable tax year. Standard deduction or personal exemption is structured as a tax credit. Exemption credits phase out for single taxpayers by $6 for each $2,500 of federal AGI above $194,504; for Married Filing Joint by $12 for each $2,500 of federal AGI above $389,013. The credit cannot be reduced to below zero.

State Rate

13.30%

Local Rate

0.00%

Combined Rate

38.30%

Deductions

None

1031 Exchange Providers in California

Asset Preservation, Inc.
deferred.com
Verified

Roseville, CA

Asset Preservation, Inc. (API), headquartered in California, is a leading national 1031 exchange company that serves as a qualified intermediary. API focuses on helping clients build wealth by using 1031 exchanges to defer capital gain taxes on investment properties, as outlined in IRC Section 1031. The company emphasizes providing unmatched service and the highest level of security in the 1031 exchange industry. API's team, including professional exchange counselors, attorneys, and accountants, collaborates to ensure smooth transactions without surprises, supported by stringent financial controls and robust security systems. They aim to be the premier IRC Section 1031 qualified intermediary nationally by delivering excellent service and secure, value-added solutions. API is a member of the Federation of Exchange Accommodators.
CDEC 1031 Exchange
deferred.com
Verified

New York, NY

Founded in 1989, Chicago Deferred Exchange Company ("CDEC") is one of the oldest and most experienced Qualified Intermediaries in the country and is part of Wintrust Financial. CDEC has commented before the IRS National Office on important industry issues and is a nationally recognized authority on Section 1031 Like-Kind Exchanges. CDEC applied for, and received, several Private Letter Rulings from the Internal Revenue Service, as well as rulings from the City of New York Department of Finance, the State of New Jersey and the District of Columbia. A separate Qualified Trust Account is created for every client on every transaction. Funds held in trust, for the benefit of our clients, are segregated from creditors' claims by operation of law.
Starker Services, Inc.
deferred.com
Verified

Los Gatos, CA

Starker Services Incorporated is the nation's oldest, largest, and most experienced independent qualified Intermediary firm, successfully completing thousands of exchanges each year. Formed following the landmark Starker tax court decision, our sole function is to provide a staff of highly trained professionals available to discuss exchange strategies and prepare accurate documentation supporting all forms of tax deferred exchanges. Every major real estate firm has used Starker to counsel their clients in the strategies which may be available on the sale of real or personal property.
1031 Specialists
deferred.com
Verified

Denver, CO

We are the 1031 Specialists trusted by savvy investors to facilitate fast, transparent, and error-free 1031 exchange transactions.Ultra-responsive. Client first. Sophisticated.With 1031 Specialists, clients get the exchange experience they deserve.
Plenti 1031 Exchange
deferred.com
Verified

Carlsbad, CA

Just a few clicks away from easy, simple, answers and tax savings...the only investor friendly 1031 firm with technology to safeguard and streamline your exchange.
Bill Jay Corporation
deferred.com
Verified

San Diego, CA

Bill Jay Corporation, operating under the name Allison-McCloskey Escrow Company, is headquartered in California and has been a trusted provider of escrow services since 1946. The company specializes in coordinating all aspects of the escrow process, ensuring detail-oriented and timely assistance. It is led by Bill McCloskey, who has been the president for 43 years, following his father's tenure. The company prides itself on employing skilled and personable escrow agents who focus on personalized customer relations. Allison-McCloskey Escrow Company is BBB accredited and certified to assist with §1031 Tax Deferred Exchanges. They emphasize their commitment to unbiased and comprehensive support for all parties involved in an escrow.
Commercial Exchange, Inc.
deferred.com
Verified

Beverly Hills, CA

Commercial Exchange, Inc., headquartered in California, is led by owner and CEO Hami M. Gabayan, who is recognized as a top escrow officer in Los Angeles. The company specializes in handling escrows for various types of properties including commercial, apartment buildings, residential income buildings, and residential properties. They also have experience in managing 1031 tax deferred exchanges and reverse exchanges. The company emphasizes superior customer service as a fundamental principle for success. Commercial Exchange, Inc. is a member of the Federation of Exchange Accommodators.
Exchange Resources, Inc.
deferred.com
Verified

San Diego, CA

Exchange Resources, Inc., headquartered in California, was founded in October 1999 by Paul Spring, a former president of a title insurance firm’s subsidiary trust company. The company was established with the aim of providing superior service and security as an independent 1031 Exchange company. Exchange Resources, Inc. focuses on educating both professionals and investor-owners about 1031 Exchanges and assisting them in implementing these exchanges as part of their financial strategies. The company is an active member of the Federation of Exchange Accommodators (FEA) and participates in teaching at FEA's nationwide meetings and seminars. Many of their staff hold the Certified Exchange Specialist (CES) designation, which demands ongoing education and testing, making them sought-after speakers across the U.S. in various professional circles.
Old Republic Exchange Company - OREXCO
deferred.com
Verified

Walnut Creek, CA

Old Republic Exchange Company (OREXCO), based in California, is a subsidiary of Old Republic International, a multi-line insurance holding company with substantial assets. Established in 1993, OREXCO specializes in secure real estate exchanges, offering a written guarantee against losses due to gross negligence, fraud, or dishonesty by its employees. The company is well-insured, with significant coverage for professional liability and a fidelity bond to protect against dishonest acts. OREXCO does not provide tax or legal advice, urging clients to consult with tax advisors to assess the suitability of an exchange for their specific circumstances. They are a member of the Federation of Exchange Accommodators, ensuring compliance with industry standards. For more information or queries, they encourage contacting their national office or visiting their website.
Peak 1031 Exchange
deferred.com
Verified

Woodland Hills, CA

Peak 1031 Exchange, headquartered in California, is a prominent national provider of tax-deferred 1031 exchange services. Established in 2003, the company has been assisting both individuals and businesses throughout the United States in managing the complexities of 1031 exchanges to meet their investment objectives. As members of the Federation of Exchange Accommodators (FEA), Peak 1031 Exchange adheres to the highest industry standards, ensuring reliable and trusted services for their clients.
Prime West Exchange, Inc.
deferred.com
Verified

Sherman Oaks, CA

Prime West Exchange, Inc., headquartered in California, is a company specializing exclusively in 1031 Exchanges. It operates under its parent company, which has been providing 1031 exchange advice and expertise for over three decades. The company offers services that focus on protecting and appreciating client equity, including establishing individual interest-bearing accounts for taxpayer exchange proceeds and allowing taxpayers to retain the interest accrued. Prime West Exchange, Inc. emphasizes a competitive pricing model for their services and boasts a team with cumulatively over four decades of experience in the field. They offer customized services to fit unique investment needs and are members of the Federation of Exchange Accommodators.
Rodeo Exchange
deferred.com
Verified

Beverly Hills, CA

Rodeo Exchange, headquartered in California, emphasizes the safety and security of exchange funds by using Exchange Manager to process transactions, ensuring funds are held in segregated escrow accounts with dual signature options available. They highlight their substantial insurance coverage, including a $50 million Fidelity Bond and $25 million in Errors and Omissions insurance. With over 40 years of industry experience, Rodeo Exchange boasts a team comprising business specialists, attorneys, Certified Exchange Specialists, brokers, and accountants. They are a member of the Federation of Exchange Accommodators, underscoring their commitment to industry standards and the preservation of 1031 exchanges.
XChange Solutions, Inc.
deferred.com
Verified

San Jose, CA

XChange Solutions, Inc., based in California, is an independent 1031 exchange intermediary founded in 1996 by Kevin Hereford. The company operates offices in San Jose, San Mateo, and Santa Cruz, California; Reno, Nevada; and Seattle, Washington. As a member of the Federation of Exchange Accommodators, XChange Solutions offers extensive expertise in local and national exchanges, including specialized knowledge in reverse and improvement exchanges. The team, with over 50 years of combined experience, provides in-depth understanding of relevant tax codes and conducts over 20 hours of tax-related education annually. They are recognized for handling thousands of exchanges and offer robust security measures for transaction funds, including a $3,000,000 fidelity bond and special bank withdrawal documentation requiring the exchanger's signature. XChange Solutions meets all "Safe Harbor" requirements set by the Treasury Department and IRS, ensuring compliance and mitigating risks related to agency or related party issues. They also offer educational resources, teaching over 100 accredited classes annually to real estate agents and accountants in California, Nevada, and Washington.
1031 Exchange Professionals, Inc.
deferred.com
Verified

San Mateo, CA

1031 Strategies & Services Group
deferred.com
Verified

Hayward, CA

1031 Strategies & Services Group, headquartered in California, has been active since 1980 through its affiliates, Independent Exchange Services, Inc. and Reverse Exchange Services, Inc. These affiliates specialize in providing detailed planning and strategic guidance for Section 1031 tax-deferred exchanges. They offer a range of services for different types of exchanges including delayed, simultaneous, reverse, built-to-suit, and international exchanges. The company positions itself as a boutique firm, focusing on offering personalized service rather than handling a high volume of transactions. They serve clients both in the United States and internationally, acting as a qualified intermediary to facilitate the deferral of capital gains taxes on exchanged investment properties.
Asset Exchange Company
deferred.com
Verified

San Francisco, CA

Asset Exchange Company, headquartered in California, is a prominent provider of 1031 Exchange accommodation services, emphasizing unparalleled customer service at reasonable rates. They offer unique features such as the Attorney Guarantee‚Ñ¢, ensuring all exchange documents are prepared and reviewed by a licensed attorney, which is exclusive to them in the industry. This service aims to provide a robust defense in case of an IRS audit. The company ensures the security of exchange funds by depositing them into FDIC insured accounts at leading financial institutions, maintaining a strict policy against commingling client funds with operating funds. Additionally, they carry substantial Errors and Omissions insurance and a Fidelity Bond for added protection. Asset Exchange Company prides itself on integrity, experience, and providing the highest level of service with attention to detail and expert guidance. They maintain transparent pricing, free from hidden fees, layered costs, or miscellaneous charges. Contrary to the information provided, they are not members of the Federation of Exchange Accommodators.
City National Bank
deferred.com
Verified

Los Angeles, CA

City National Bank, headquartered in California, has been operating since 1954 with a focus on prioritizing people and communities. The company emphasizes the importance of impact on real lives over mere financial success. They offer various services, tools, and technology that reflect their values, which are showcased through stories and an evolving mural on their website. However, they are not a member of the Federation of Exchange Accommodators.
Downstream Exchange Company
deferred.com
Verified

Pasadena, CA

Exeter 1031 Exchange Services, LLC
deferred.com
Verified

San Diego, CA

Exeter 1031 Exchange Services, LLC, headquartered in California, positions itself as a financial services firm emphasizing protection, safety, and soundness. The company is not a member of the Federation of Exchange Accommodators. They offer regulatory oversight by choosing to have their clients' 1031 Exchange funds held in separate, segregated Qualified Trust Accounts managed by Exeter Trust Company, which is licensed, regulated, and audited by the Wyoming Division of Banking. Exeter 1031 Exchange Services has accumulated extensive expertise in handling 1031 Exchanges and works closely with clients' advisors on complex issues. They also maintain significant fidelity bond coverage, errors and omissions (E&O) insurance, and regulatory-required equity capital reserves to further ensure client protection.
First General Bank
deferred.com
Verified

Rowland Heights, CA

First General Bank is a full-service commercial bank based in Southern California, focusing on serving small to medium-sized businesses and individuals in the region. It emphasizes personalized service and offers a range of traditional and online banking products and cash management services. The bank is recognized for its deep community ties and commitment to superior customer service. Additionally, First General Bank is certified by the U.S. Department of the Treasury as a Community Development Financial Institution (CDFI), which underscores its mission to promote community development and serve low-income and underserved communities, including lending to minorities. However, it is not a member of the Federation of Exchange Accommodators.
Deferred.com Resources

Learn More