Tax-Deferred Exchange Uses ‘Accommodator’

The Feb. 21 story regarding the tax-deferred exchange (“The Nation’s Housing”) falls short in the advice to check references of an “intermediary.” In the Western states, the term accommodator is used for “delayed” exchanges.

Accommodator corporations are usually closely related to a legal accounting or escrow corporation. Unfortunately, the exchangers’ cash sits in the accommodators’ bank account. It is not regulated or audited by either the Department of Real Estate, Department of Corporations or the Escrow Agents’ Fidelity Corporation.

Public records show large losses of these funds, due to a few bad apples in the accommodator business, and fidelity insurance coverage on the public money held by an accommodator is rare.

Anyone who structures an exchange should be extremely well-informed prior to choosing the accommodator entity or the choosing of the “delayed” method of exchanging.

JUDY BUSCH, Capistrano Beach