SB 1007 is an attempt to wash away any memory of Mike Machado’s ignorance of the entire 1031 Exchange process, it’s rules, and the unregulated Dodge City atmosphere the industry has operated in (with impunity) to this point in it’s history.
If I were a California Qualified Intermediary, investor, or anyone involved in this industry who is an honest businessman I would be screaming from the mountain top. Be heard now or forever hold your peace!
In “No Wonder the 1031 Advance Fiasco Is Littered With ‘Dead Financial’ Bodies” I outlined the following:
1. May of 2007 when asked by the San Jose Mercury News about the 1031 Advance-1031 Tax Group fiasco led by Ed Okun, Machado was quoted as say:
“It appears the consumers are not protected. . . This is unforgivable. We’re looking at how best to address that.”
2. Why or how could a politician acting as the chair for the California Senate’s Banking, Finance, and Insurance Committee be so out of touch and ignorant to his job?
The following is the contact information for the Senate Rules Committee both address and phone number. I provide this information so that you may make your voice heard. After reading the committee’s provisions in the “Third Reading” dated Jan 18, 2008 you might wish to call:
SENATE RULES COMMITTEE | SB 1007|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524| |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
Interesting provisions of this session begin on page 3 “Provides that a EF (Exchange Facilitator) is NOT any of the following:”
A. The taxpayer or a disqualified person as
those terms are defined under specified Treasury
Analysis: What Treasury “regulations”? And why are we involving more government bureacracy without involving any criminal arm of the government directly?
B. A financial institution that is not facilitating exchanges, but is acting as a depository for exchange funds or is acting solely as a qualified escrow holder or qualified trustee, as those terms are defined under specified Treasury
Analysis: Again we find Treasury regulations mentioned with no specifics provided.
And the most curious of all–
D. A person that teaches professionals about tax-deferred exchanges or trains them to act as EFs.
Analysis: How does teaching professionals about tax-deferred exchanges automatically disqualify that person from acting as a EF and why?
Again the fact remains the same: Dual Signatures is the only method that ensures that the investor has the ability to monitor the progress of the transaction in a transparent, above board, honest manner without any illegal removal of funds for purposes of gain by the Ed Okun’s or Donald McGhan’s of the world.