1031 Exchange - The Role of Qualified Intermediary

As per section 1031, a Qualified Intermediary is essential to complete a 1031 property exchange successfully. The QI plays a very important role in a 1031 exchange and serves a variety of functions. The QI creates the exchange of properties, holds the proceeds and prepares the legal documents required for the 1031 property exchange.

The Qualified Intermediary is a person or firm that can legally hold proceeds to facilitate a 1031 exchange. The intermediary should not be a relative or agent of the exchanging party. As an exception, a real estate agent might serve as an QI if the current transaction is the only transaction in which the agent has represented the exchanging party over the last two years.