What is a Qualified Intermediary?

In 1921, tax deferred exchanges were introduced. Since that time many significant tax law changes have taken place, the most significant being the Final Treasury Regulations of 1991, which defined the role of the "Qualified Intermediary" and streamlined the exchange process. Today, knowledgeable investors seek an experienced Qualified Intermediary to handle exchanges.

The use of a Qualified Intermediary significantly reduces transactional stress by assuring the proper execution of required documentation. Qualified Intermediaries provide a vast array of options so that investors have access to the full power of exchanges.

Many investors are surprised to discover that the Qualified Intermediary industry is not nationally regulated. Consequently, the careful selection of the Qualified Intermediary is essential to ensure the highest levels of expertise and security of funds.

A Qualified Intermediary provides the key services as defined and required by the IRC and Treasury Regulations.

Does your Qualified Intermediary qualify pursuant to IRC §1031
Do they confer with each Exchanger's attorney and/or tax advisor and forwards legal documentation, as requested, so that the IRC §1031 rules and regulations are thoroughly understood
Do they prepares the necessary documentation - Exchange Agreement, Assignment(s), Notice of Assignment(s), Qualified Exchange Account Form, Security of Funds Instruments and Instructions to each Closer/Escrow Officer - and oversees each closing to assist in proper §1031 procedures
Do they, via the proper exchange documentation, consummates the sale of the relinquished property and the purchase of the replacement property
Do they hold and protect the exchange proceeds on behalf of the Exchanger until funds are needed to purchase the replacement property

Do they provides guidance, information and critical timelines throughout the entire exchange.

This information is not intended to replace qualified legal and/or tax advisor's.
Each investment must be reviewed, each specific transaction is unique, your
legal and/or tax advisor are important to your strategy of 1031 Exchange.