01 Step 01 of 08
Sign the sale contract
The exchanger signs a contract to sell a relinquished property to the buyer.
National Qualified Intermediary · Since 1990
Trusted 1031 Exchange Accommodators Backed By Licensed CPAs
Universal Pacific is a national 1031 exchange company that acts as your Qualified Intermediary, with the exchange handled by licensed CPAs and your funds held in a bank custody account. A 1031 exchange lets you defer capital gains tax when you sell investment real estate and reinvest in a like-kind replacement property. We handle delayed, simultaneous, reverse, and improvement exchanges nationwide.
Qualified Intermediary Bank-Custodied Funds Personal Service
Michael Bergman, CPA
President & CEO · California CPA
Hundreds of Millions
in transactions completed
$2 Million
Errors & Omissions insurance
Since 1990
CPA licensed
All 50 States
nationwide service
Complete your 1031 tax-deferred exchange with professional support from a Qualified Intermediary led by licensed CPAs.
Universal Pacific is a national 1031 exchange company known for white-glove service, secure fund handling, and IRS-compliant exchange handling.
Start an ExchangeUnder Section 1031 of the United States Internal Revenue Code (26 U.S.C. § 1031), the exchange of certain types of property may defer the recognition of capital gains or losses due upon sale, and hence defer any capital gains taxes otherwise due.
Our Services
Our 1031 Exchange Intermediary Services Include
Most Common
Delayed Exchange
Existing property is sold, and a replacement property is purchased within 180 days.
Learn more →Simultaneous Exchange
Simultaneously transfer ownership of both the relinquished property and the replacement property.
Learn more →Reverse Exchange
The replacement property is identified and purchased before the relinquished property is sold.
Learn more →Improvement Exchange
This type of exchange occurs when an existing owner elects to either make improvements to an identified replacement property or construct a new replacement property.
Learn more → Why Investors Trust Us
Why Real Estate Investors Trust Universal Pacific
Not all 1031 exchange companies are built the same. At Universal Pacific, we've built more than a process—we've built a reputation. Our clients include real estate attorneys, brokers, CPAs, and high-volume investors who depend on airtight execution for six- and seven-figure transactions. They choose us not for convenience, but for confidence. Here’s what sets us apart:
1031 Exchange Calculator
01
Hundreds of Millions in Transactions Completed
We've supported 1031 exchanges across every asset class—from multifamily portfolios and land development to industrial and retail swaps.
02
Licensed CPAs, Not Just Paper Processors
Our internal team doesn't outsource compliance. Every exchange is reviewed and documented by licensed tax professionals. Qualified intermediary services are reviewed and overseen by Michael Bergman, CPA (California CPA, licensed since 1990).
03
Multi-Layered Risk Protection
With $2 million in E&O insurance, segregated accounts, and multi-layered authorization, we treat every exchange like it's our own capital at stake.
04
Built for High-Stakes Transactions
From complex reverse exchanges to multi-asset rollovers, we specialize in solving high-dollar, deadline-driven transactions with precision.
If you’re moving more than just real estate, you need more than just a facilitator.
The Exchange, Step by Step
Complete an Exchange with Universal Pacific 1031 Exchange
Eight coordinated steps, tracked end to end against the 45- and 180-day IRS deadlines. Scroll to follow the sequence.
Client Voices
Universal Pacific Testimonials
Straight from our clients — 5.0 out of 5 stars across 16 Google reviews.
Fund Safeguarding
Safeguarding exchange funds is our priority.
We follow a simple yet very stringent process of keeping exchange funds secure. Upon the sale of the relinquished property, all exchange funds are wired from the sale escrow and held in a Universal Pacific 1031 Exchange segregated bank account. Upon purchase of the replacement property(ies), all exchange funds are wired back to the purchase escrow from the Universal Pacific 1031 Exchange segregated bank account upon written authorization from exchanger to release those funds.
Universal Pacific 1031 Exchange carries $2 million of Errors and Omissions insurance.
The Stakes
Why Your Qualified Intermediary Matters More Than You Think
Your 1031 exchange is only as strong as the intermediary behind it. Many investors mistakenly view all 1031 facilitators as the same, but there's no federal regulation overseeing qualified intermediaries. That means anyone can claim to be a 1031 exchange company, even without experience, oversight, or compliance safeguards. Here’s what shapes how we work:
CPA-Led Exchange Structure
Every transaction is reviewed by licensed CPAs trained in IRS Section 1031 guidelines, real estate law, and tax deferral strategy.
Segregated Exchange Accounts
Your proceeds are never co-mingled. We assign a dedicated bank account to each exchange and require written authorization for any movement of funds.
Compliance, Not Just Convenience
We don't cut corners. Every deadline, identification rule, and assignment step is followed with precision, because one mistake can trigger full capital gains taxes.
Nationally Trusted, Locally Effective
From Los Angeles to Miami, we've supported investors in complex property exchanges involving industrial, multifamily, vacant land, and commercial development deals.
Choosing the wrong qualified intermediary can cost you six figures in tax liability. Choosing the right one unlocks lifetime compounding returns through legal deferral.
Free tools
Model your numbers before you sell
Eight interactive calculators — capital gains deferral, boot, deadlines, cap rate and more. Everything runs right here in your browser; nothing leaves your device.
Estimate the federal capital-gains tax, depreciation recapture, NIIT and state tax you can defer with a properly structured 1031 exchange.
Open tool →Calculate the capitalization rate of an income property from its net operating income and value.
Open tool →Estimate total and simple annualized return on investment for a property purchase and hold.
Open tool →Estimate federal depreciation recapture (unrecaptured §1250 gain), §1245 recapture, residual capital gain, NIIT and California tax using the Schedule D Tax Worksheet stacking method.
Open tool →Determine taxable boot (cash and mortgage) in a partial 1031 exchange and the federal, NIIT and state tax on it, using the Treas. Reg. §1.1031(d)-2 netting rules.
Open tool →Calculate your 45-day identification and 180-day exchange deadlines from the relinquished property closing date.
Open tool → Our Standard
Beyond IRS Rules: What Distinguishes a Skilled Intermediary
Understanding 1031 exchanges isn't just about knowing the rules. It's about aligning your tax strategy with your long-term goals while minimizing risk at every step.
At Universal Pacific, our process is built on decades of IRS rulings, industry whitepapers, and in-field tax advisory experience. For a deeper understanding of 1031 exchanges, review the IRS 1031 Exchange Overview and the Miscellaneous Qualified Intermediary Information Overview. While the technical foundations remain consistent, the way your intermediary interprets and applies them makes all the difference.
This is where most 1031 exchange companies fall short—and where we build our reputation. Investors who prioritize precision, security, and tax compliance don't just rely on federal guidelines—they rely on experts who live and breathe them daily.
Documentation Basics
1031 Contract Documentation Basics
Exchange Agreement
The owner of the property and the Qualified Intermediary enter into an exchange agreement on or before the date of the sale (delayed exchange) or purchase (reverse exchange) providing:
- The sale of exchange property and the purchase of the exchange property are interdependent—both must happen for the exchange to be complete.
- The exchange agreement must contemplate a reciprocal transfer rather than a transfer of property for money consideration only.
- Access to the funds is restricted so the owner is not considered to be in receipt of the funds.
Contract Assignment
- The sale agreement for the asset to be sold must be assigned to the Qualified Intermediary prior to the date of the sale.
- The purchaser must acknowledge the assignment on or before the date of the sale in order for the asset to be sold.
- The purchase agreement for the replacement property must be assigned to the Qualified Intermediary.
- The seller of the replacement property must acknowledge the assignment on or before the date of the purchase.
From the Blog
All articles Learn More About 1031 Exchanges
Check out our blog to learn more about the process.
Reverse & Improvement
Reverse 1031 Exchange Financing: A Comprehensive Guide
You find the right replacement property, but you are not ready to sell your current property yet. A reverse 1031 exchange lets you buy the new property first and sell the old one later. The IRS has a safe harbor for these transactions, but the financing can be difficult. You need a plan for how […]
09/14/2026 Michael Bergman
Read more → 
Strategy & Advanced
1031 Exchange: How Much to Reinvest
Working out how much of your sale proceeds actually has to go into the next property is the part of a 1031 exchange that keeps most investors up at night. To defer all capital gains tax, you must reinvest the entire net sale proceeds and acquire replacement property worth at least as much as the […]
08/25/2026 Michael Bergman
Read more → 
Rules & Requirements
1031 Exchange Related Party Transaction Rules
Yes, you can complete a 1031 exchange with a related party, but two extra rules apply on top of the usual ones. Section 267(b) decides who counts as related, and the list is narrower than most people assume. Section 1031(f) then requires both sides to hold their properties for two years after the exchange, or […]
08/21/2026 Michael Bergman
Read more → Common Questions
1031 Exchange FAQs
The questions investors ask us most — grouped so you can find the answer that fits your exchange.
More FAQs →Timelines & how it works
- You must identify your replacement property(ies) within 45 calendar days and close the purchase of the replacement property(ies) within 180 calendar days after the sale of the relinquished property or the taxpayer's tax filing deadline, including extensions, whichever is sooner.
- A 1031 exchange allows you to defer capital gains tax by selling one investment property and reinvesting the proceeds into another like-kind property. The process must follow strict IRS timelines and be facilitated by a qualified intermediary who holds your funds and coordinates the legal assignments.
- It generally makes sense to sell your investment property and exchange into a like kind investment of equal or higher value if one or more of the following factors is applicable to your existing investment: depreciation allowances have ended; no mortgage on property; existing cash flow & management issues; opportunity to trade up into a less management intensive investment property; estate planning.
- The key 1031 exchange rules include identifying your replacement property within 45 days, closing within 180 days, using a qualified intermediary, and maintaining continuity in how the title is held. Failure to follow any of these rules can disqualify your exchange and trigger full taxation.
Process & paperwork
- The paperwork required consists of an exchange agreement plus the necessary assignments and acceptances prepared by an independent exchange accommodator. We will take care of all the required paperwork and keep you informed of all the due dates.
- 1031 exchanges can be complicated so they have to be done in a very specific manner in order to comply with the provisions of the Internal Revenue Code. Our promise is that we will prepare, monitor and guide your exchange transaction according to the documented standards of business care in order to achieve the most favorable outcome.
- We handle every compliance step—from preparing the Exchange Agreement and assigning contracts to holding your funds in a segregated account and coordinating closings. Our job is to protect your transaction, minimize risk, and ensure you meet all IRS deadlines and documentation requirements.
- No, the IRS will not allow us to act as your tax advisor and/or attorney when acting as your qualified intermediary. We will however work very closely with your tax advisor and/or attorney to keep your transaction on track.
Costs & choosing your QI
- Fees typically range between $850 and $1,500, depending on the complexity of your exchange. Universal Pacific maintains a competitive flat-rate pricing model with no hidden fees or junk charges. Complex exchanges (like reverse or improvement structures) may incur additional legal structuring costs.
- No, all 1031 exchanges are not the same. Each exchange has its’ own set of requirements. We have the expertise, knowledge, experience and resources to help facilitate your Section 1031 tax deferred exchange. We maintain a competitive pricing model for our exchanges.
- A 1031 Exchange Accommodator—also known as a Qualified Intermediary (QI)—is a third party who prepares the exchange documentation, holds proceeds from the sale, and releases funds during the replacement property purchase. They're required by IRS rules to facilitate a valid exchange and must remain independent.
- 1031 Exchange Intermediaries are not federally regulated. That's why it's critical to choose a facilitator backed by licensed CPAs, covered by E&O insurance, and operating under strict trust and security protocols.
Tax details & risk
- If you do not follow the procedures required by Section 1031 of the Internal Revenue Code, the exchange may be disallowed by the IRS resulting in a capital gains tax liability to the taxpayer.
- Boot received is the money or the fair market value of “other property” received by the taxpayer in an exchange. Money includes all cash and cash equivalents plus liabilities of the taxpayer assumed by the other party, or liabilities to which the property exchanged by the taxpayer is subject to. Any boot received is taxable (to the extent of gain realized on the exchange). Therefore, A Taxpayer Must Not Receive “Boot” from an exchange in order for a Section 1031 exchange to be 1031 exchange.
- Yes, real estate commissions paid on the sale of your relinquished property are typically considered allowable exchange expenses. These costs can reduce your taxable boot and help protect your deferral status when reinvesting proceeds.
- Yes. Many investors convert their exchange property into a primary residence after holding it for two years under safe-harbor rules. However, strict usage requirements apply, and you should always consult a tax advisor before making this change.
In Depth
The Rules of "Boot" in a Section 1031 Exchange
A taxpayer must not receive "boot" from an exchange in order for a Section 1031 exchange to be fully tax-deferred. Any boot received is taxable to the extent of gain realized on the exchange. This is acceptable when a seller desires some cash and is willing to pay some taxes. Otherwise, boot should be avoided in order for a 1031 exchange to be tax free.
The term "boot" is not used in the Internal Revenue Code or the Regulations, but is commonly used in discussing the tax consequences of a Section 1031 tax-deferred exchange. Boot received is the money or the fair market value of "other property" received by the taxpayer in an exchange. Money includes all cash equivalents plus liabilities of the taxpayer assumed by the other party, or liabilities to which the property exchanged by the taxpayer is subject.
Boot can be inadvertent and result from a variety of factors. The most common sources of boot include:
Sale proceeds used to service non-transaction costs at closing
If proceeds of sale are used to service non-transaction costs at closing, the result is the same as if the taxpayer received cash from the exchange and then used the cash to pay these costs. Taxpayers are encouraged to bring cash to the closing of the sale of their relinquished property to pay for rent prorations, tenant damage deposits transferred to the buyer, property tax prorations, and any other charges unrelated to the closing.
Cash boot and debt reduction boot
Cash boot is usually "net cash received" at the closing of either the relinquished or the replacement property. Debt reduction boot occurs when a taxpayer's debt on replacement property is less than the debt on the relinquished property—which happens when a taxpayer is "trading down."
Boot Offset Rules
Only the net boot received by a taxpayer is taxed. Cash boot paid offsets cash boot received (but only at the same closing table). Debt incurred on the replacement property offsets debt-reduction boot received on the relinquished property. Debt boot paid never offsets cash boot received—net cash boot received is always taxable. Exchange expenses paid offset net cash boot received.
Rules of Thumb
- Always trade "across" or up. Never trade down (the "even or up rule"). Trading down always results in boot received.
- Bring cash to the closing of the relinquished property to cover charges that are not transaction costs.
- Do not receive property which is not like-kind.
- Do not over-finance replacement property.
1031 Contract Documentation Basics
Exchange Agreement
The owner of the property and the Qualified Intermediary enter into an exchange agreement on or before the date of the sale (delayed exchange) or purchase (reverse exchange) providing:
-
The sale of exchange property and the purchase of the exchange property are interdependent, that is, they both must happen for the exchange to be complete.
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The exchange agreement must contemplate a reciprocal transfer rather than a transfer of property for money consideration only.
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Access to the funds is restricted so the owner is not considered to be in receipt of the funds.
Contract Assignment
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The sale agreement for the asset to be sold must be assigned to the Qualified Intermediary prior to the date of the sale.
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The purchaser must acknowledge the assignment on or before the date of the sale in order for the asset to be sold.
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The purchase agreement for the replacement property must be assigned to the Qualified Intermediary.
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The seller of the replacement property must acknowledge the assignment on or before the date of the purchase.
The Rules of “Boot” in a Section 1031 Exchange
A Taxpayer Must Not Receive “Boot” from an exchange in order for a Section 1031 exchange to be 1031 exchange. Any boot received is taxable (to the extent of gain realized on the exchange). This is okay when a seller desires some cash and is willing to pay some taxes. Otherwise, boot should be avoided in order for a 1031 Exchange to be tax free.
The term “boot” is not used in the Internal Revenue Code or the Regulations, but is commonly used in discussing the tax consequences of a Section 1031 tax-deferred exchange. Boot received is the money or the fair market value of “other property” received by the taxpayer in an exchange. Money includes all cash equivalents plus liabilities of the taxpayer assumed by the other party, or liabilities to which the property exchanged by the taxpayer is subject to. “Other property” is property that is non-like-kind, such as personal property received in an exchange of real property, property used for personal purposes, or “non-qualified property.” “Other property” also includes such things as a promissory note received from a buyer (Seller Financing).
Boot can be in advertent and result from a variety of factors. It is important for a taxpayer to understand what can result in boot if taxable income is to be avoided. The most common sources of boot include the following:
Sale proceeds being used to service costs at closing which are not closing expenses. If proceeds of sale are used to service non-transaction costs at closing, the result is the same as if the taxpayer received cash from the exchange, and then used the cash to pay these costs. Taxpayers are encouraged to bring cash to the closing of the sale of their relinquished property to pay for the following non-transaction costs:
Rent prorations.
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Rent prorations.
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Tenant damage deposits transferred to the buyer.
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Property tax prorations? Maybe, see explanation below.
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Any other charges unrelated to the closing.
Cash boot received during the exchange. This will usually be in the form of “net cash received” at the closing of either the relinquished property or the replacement property.
Debt reduction bootwhich occurs when a taxpayer’s debt on replacement property is less than the debt which was on the relinquished property. Debt reduction boot can occur when a taxpayer is “trading down” in the exchange.
Property tax prorations on the relinquished property settlement statement can be considered as service of debt based on PLR 8328011. Under this rationale exchange cash used to service tax prorations should not result in taxable boot. However, taxpayers may want to bring cash to the relinquished property closing anyway in order to resolve this issue.
Excess borrowing to acquire replacement property. Borrowing more money than is necessary to close on replacement property will cause cash being held by an Intermediary to be excessive for the closing. Excess cash held by an Intermediary is distributed to the taxpayer, resulting in cash boot to the taxpayer. Taxpayers must use all cash being held by an Intermediary for replacement property. Additional financing must be no more than what is necessary, in addition to the cash, to close on the property.
Loan acquisition costs with respect to the replacement property which are serviced from exchange funds being brought to the closing. Loan acquisition costs include origination fees and other fees related to acquiring the loan. Taxpayers usually take the position that loan acquisition costs are being serviced from the proceeds of the loan. However, the IRS may take a position that these costs are being serviced from Exchange Funds. This position is usually the position of the financing institution also. There is no guidance in the form of Treasury Regulations on this issue at the present time which is helpful.
Non-like-kind property which is received from the exchange, in addition to like-kind property (real estate). Non-like-kind property could include the following:
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Seller financing, promissory note.
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Sprinkler equipment acquired with farm land.
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Ditch stock in a mutual irrigation ditch company acquired with farm land (possible issue).
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Big T Water acquired with farm land (possible issue).
Acquisition of ditch stock or Big T water is a possible issue with the IRS. Most taxpayers report their exchanges of farm land by taking the position that water on the farm land is indistinguishable from, and the same thing as real estate. The IRS has been known to have a different view.
Boot Offset Rules – Only the net boot received by a taxpayer is taxed. In determining the amount of net boot received by the taxpayer, certain offsets are allowed and others are not, as follows:
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Cash boot paid offsets cash boot received (but only at the same closing table).
Cash boot paid at the replacement property closing table does not offset cash boot received at the relinquished property closing table (Reg. §1.1031(k)-1(j)(3) Example 2). This rule probably also applies to inadvertent boot received at the relinquished property closing table because of prorations, etc. (see above).
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Debt incurred on the replacement property offsets debt-reduction boot received on the relinquished property.
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Cash boot paid offsets debt – reduction boot received.
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Debt boot paid never offsets cash boot received (net cash boot received is always taxable).
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Exchange expenses (transaction and closing costs) paid (relinquished property and replacement property closings) offset net cash boot received.
Rules of Thumb:
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Always trade “across” or up. Never trade down (the “even or up rule”). Trading down always results in boot received, either cash, debt reduction or both. The boot received can be mitigated by exchange expenses paid.
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Bring cash to the closing of the relinquished property to cover charges, which are not transaction costs (see above).
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Do not receive property which is not like-kind.
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Do not over-finance replacement property. Financing should be limited to the amount of money necessary to close on the replacement property in addition to exchange funds which will be brought to the replacement property closing.
Start an Exchange
Ready to defer your capital gains?
Speak with a CPA-led qualified intermediary. We line up your exchange before you sell — not after.