Do 1031 exchange businesses qualify as MSBs? It seems that they would, but I'd like to be sure.

Thanks.

1031 exchanges are to defer the appreciated value on a real estate sale until another property can be found so that the gain on the sale won't be taxed.

It's kind of like a "suspended" escrow.

Why do you think they qualify as an MBS?

My thinking is that since they are transmitting funds they qualify. For BSA purposes, the term “money transmitter” is defined as a licensed sender of money or any other person who engages as a business in the transmission of funds, including any person who engages as a business in an informal money transfer system or any network of people who engage as a business in facilitating the transfer of money domestically or internationally outside of the conventional financial institutions system.
This definition is broad enough to encompass various types of money transmission and so I wondered if 1031 exchanges are covered. Is part of the1031 exchange process(admittedly I'm not a 1031 expert) that would exclude them?

Thanks,

Michael

I don't think you understand what a "1031 exhange" really is. Click here and read up!!

So, since the money being transferred is my own money from one property to another and is only held temporarily by the exchanger, therefore it is not being transmitted to a 3rd party and they are using the conventional banking system so the exchanger doesn't qualify as a money transmittor?

You got it.

Thank you for your assistance.

Michael