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The Role of the Qualified Intermediary ("Accommodator")

A Qualified Intermediary is an individual who possesses the experience and training to handle all administrative and facilitative aspects of an Investor’s 1031 Exchange transaction. In addition, Section 1.1031 of the Department of the Treasury Regulations denotes that a Qualified Intermediary is necessary for any and all 1031 Exchanges.

Qualified Intermediaries have numerous duties within the confines of a 1031 Exchange, including but not limited to:

  • Correctly structure a 1031 Exchange transaction in regards to documentation.
  • Handling all funds utilized in regards to a 1031 Exchange transaction.
  • To ensure compliance with all applicable codes and laws by acting as a consultant to all interested parties on the Investor’s side of the transaction.

Qualified Intermediaries need to ensure that their training and knowledge are up to par with all new legal and professional developments in the field; they need to be authoritative in all guidance and advisory services they offer to an Investor to ensure a proper and successful 1031 Exchange transaction. That said, an Investor should be extremely careful when making the selection of their Qualified Intermediary; they should feel free to inquire about their qualifications and transactional history to make sure they are selecting the right person for the job.

Another unique and important aspect of a Qualified Intermediary’s duties includes receiving, holding and safeguarding the Investor’s 1031 Exchange funds to prevent constructive receipt of the funds by the Investor.

While sweeping reforms and state legislation are beginning to usher in change, at current time Qualified Intermediaries in most states have no governmental oversight and are not required to possess a license, nor do they need to be bonded or insured, or adhere to any other financial or legal standards, including audits or maintaining minimum equity capitalization.

Ensuring correct preparation of legal documentation is a vital task of any Qualified Intermediary; the slightest error an translate into the Internal Revenue Service disallowing the Investor’s 1031 Exchange transaction, resulting in fines and recapture and capital gain income tax liabilities.

While oversight of Qualified Intermediaries are at a minimum, there are instances where certain individuals many not act as one; for example, an Investor cannot act as their own personal Qualified Intermediary; in addition, any individual listed in Section 267(b) and 707(b) of the Internal Revenue Code - anyone who is legally bound to the Investor in any capacity - also cannot act as the Investor’s Qualified Intermediary.

Disclaimer: 1031 exchange made simple does not guarantee the performance of the QI's in our referral network and we can not be held liable for any misrepresentations or mistakes in regards to a 1031 exchange by one of the QI's that we refer to you. 1031 Exchange made simple does not provide tax advice nor can we make representations regarding the tax consequences of an exchange transaction. 1031 Exchange made simple is a 1031 QI Referral Network. 1031 made simple is not responsible (in any way) for the performance, creditability, and financial condition of any QI in our network. In this new economic environment it is imperative that all potential 1031 exchange customers do their own due diligence and research on any QI that they may use, on a 1031 exchange. Please verify and check the validity of the Bonding and Insurance of your QI. It may be wise to have your 1031 exchange accounts set up as separate, individual customer accounts. Our web site is to be used as a information based web site only. All parties doing a 1031 exchange must consult their tax advisors or attorney for this information.

If you are in need of a qualified intermediary and would like to be matched up with one of our fully licensed and bonded QI's in your state, please call 1-877-812-1031

If you are a fully licensed Qualified Intermediary and would like to be evaluated and possibly added to our network of QI state and local providers, please call us today at: 1-877-812-1031

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Unless expressly stated otherwise on this website, (1) nothing contained in this website was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended; (2) any written statement contained on this website relating to any federal tax transaction or matter may not be used by any person to support the promotion or marketing or to recommend any federal tax transaction or matter; and (3) any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor with respect to any federal tax transaction or matter contained in this website. No one, without our express written permission, may use any part of this website in promoting, marketing or recommending an arrangement relating to any federal tax matter to one or more taxpayers.

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