51000
. As used in this division, the following terms shall have the
following meanings:
(a) "Client" means the taxpayer with whom the exchange facilitator
enters into an agreement described in subparagraph (A) of paragraph
(1) of subdivision (b).
(b) (1) "Exchange facilitator" means a person that does any of the
following:
(A) Facilitates, for a fee, as defined in subdivision (c), an
exchange of like-kind property by entering into an agreement with a
taxpayer by which the exchange facilitator acquires from the taxpayer
the contractual rights to sell the taxpayer's relinquished property
located in this state and transfers a replacement property to the
taxpayer as a qualified intermediary as that term is defined under
Treasury Regulation Section 1.1031(k)-1(g)(4), or enters into an
agreement with the taxpayer to take title to a property in this state
as an exchange accommodation titleholder (EAT) as that term is
defined in Internal Revenue Service Revenue Procedure 2000-37, or
enters into an agreement with a taxpayer to act as a qualified
trustee or qualified escrow holder as those terms are defined under
Treasury Regulation Section 1.1031(k)-1(g)(3), except as provided in
paragraph (2).
(B) Maintains an office in this state for the purpose of
soliciting business as an exchange facilitator.
(C) Holds himself, herself, or itself out as an exchange
facilitator by advertising any of the services listed in paragraph
(A) or soliciting clients in printed publications, direct mail,
television or radio advertisements, telephone calls, facsimile
transmissions, or other electronic communications directed to the
general public in this state for purposes of providing any of those
services.
(2) "Exchange facilitator" does not include any of the following:
(A) A taxpayer or a disqualified person, as that term is defined
under Treasury Regulation Section 1.1031(k)-1(k), seeking to qualify
for the nonrecognition provisions of Section 1031 of the Internal
Revenue Code of 1986, as amended.
(B) A financial institution that is acting as a depository for
exchange funds or that is acting solely as a qualified escrow holder
or qualified trustee, as those terms are defined under Treasury
Regulation Section 1.1031(k)-1(g)(3), and that is not facilitating
exchanges.
(C) A title insurance company, underwritten title company, or
escrow company that is acting solely as a qualified escrow holder or
qualified trustee, as those terms are defined under Treasury
Regulation Section 1.1031(k)-1(g)(3), and that is not facilitating
exchanges.
(D) A person that advertises for and teaches seminars or classes,
or otherwise makes a presentation, to attorneys, accountants, real
estate professionals, tax professionals, or other professionals, when
the primary purpose is to teach the professionals about tax-deferred
exchanges or to train them to act as exchange facilitators.
(E) A qualified intermediary, as that term is defined under
Treasury Regulation 1.1031(k)-1(g)(4), who holds exchange funds from
the disposition of relinquished property located outside this state.
(F) An entity in which an exchange accommodation titleholder (EAT)
has a 100 percent interest and which is used by the EAT to take
title to property in this state.
(c) "Fee" means compensation of any nature, direct or indirect,
monetary or in-kind, that is received by a person or related person
as defined in Section 267(b) or 707(b) of the Internal Revenue Code
for any services relating to or incidental to the exchange of
like-kind property.
(d) "Financial institution" means a bank, credit union, savings
and loan association, savings bank, or trust company chartered under
the laws of this state or the United States whose accounts are
insured by the full faith and credit of the United States, the
Federal Deposit Insurance Corporation, the National Credit Union
Share Insurance Fund, or other similar or successor programs.
(e) A person is "affiliated" with another specified person if the
person directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with the
other specified person.
(f) "Person" means an individual, a corporation, a partnership, a
limited liability company, a joint venture, an association, a joint
stock company, a trust, or any other form of a legal entity, and
includes the agents and employees of that person.
(g) "Prudent investor standard" means the prudent investor rule
described in Article 2.5 (commencing with Section 16045) of Chapter 1
of Part 4 of Division 9 of the Probate Code.