Tax credits and incentives advisory firm Engineered Tax Services has collaborated with broker-dealer RCX Capital Group to launch tax-advantaged turnkey asset management platform ETS1031.
The platform will be used for the delivery of Section 1031 exchange and Opportunity Zone-qualifying investments to the two organizations' networks of accounting firms and real estate advisors. ETS1031 will also leverage the core competencies and expertise of these networks and use technology to deliver a complete end-to-end turnkey solution.
In partnership with RCX, Engineered Tax Services can deliver a large variety of 1031 replacement property options while providing partners with the ability to design and model portfolios of replacement properties, facilitate transactions and monitor the investments over their life cycle, and provide educational support throughout the process, according to Julio Gonzalez, founder and CEO of Engineered Tax Services.
"Our relationship with RCX Capital Group is a natural extension of our core tax service offering. The tax-driven nature of the decision process around a 1031 exchange transaction or Opportunity Zone investment complements and plays to our strengths as a company," Gonzalez said, in a statement. "The platform fosters collaboration across disciplines, with the goal of improving information-sharing during the process. Ultimately, the solution is designed to reduce pain points in the process and help our partners and their clients meet their investment objectives."
As a registered broker-dealer, RCX Capital Group provides the investment specialists and handles the due diligence of sponsors and product, and facilitates replacement property transactions that qualify as securities. Meanwhile, Engineered Tax Services' network of accounting firms can educate, identify and qualify client 1031 exchange needs earlier in the process, collaborate via the system, and deliver clients to the ETS1031 platform.
"When you look at the growth trajectory of the 1031 marketplace, driven by the baby boomer generation, and the unique attributes of specific structures like the Delaware Statutory Trust, the real estate solution becomes necessity-driven," said Mike Scherer, a partner at RCX Capital Group, in a statement. "It is a simple point if a client sells highly appreciated real estate the client either does nothing and pays the tax or they facilitate a 1031 exchange. If it is the sale of a business, perhaps a combination of an Opportunity Zone and a 1031 exchange is appropriate. At the core of what we are delivering is helping clients learn what their options are early in the process so they can make the most informed decision possible."
