To facilitate a 1031 exchange it is required to utilize the services of a qualified intermediary (QI), also known as a facilitator or accommodator. A QI is the person or entity that acts as the middleman in the exchange, providing the paperwork, oversight, escrow services and expertise necessary to assure that the exchange qualifies as an exchange under Section 1031 of the Internal Revenue Code. Even though a 1031 exchange is a complicated process, an exchange using a good QI can become a simple process and look surprisingly like a standard sale. The intermediary performs these services on a fee-for-service basis.
In a 1031 exchange you cannot take physical possession or constructive receipt of the money resulting from the sale of your property. Therefore, since they are holding your money, it is very important to investigate the bonding, background, reputation and financial strength of a QI. The QI industry is largely unregulated, so it is very important to deal with a reputable, professional qualified intermediary.
1031 Exchange Place maintains a database of over 300 qualified intermediaries from across the United States. We can assist in selecting an intermediary with a good reputation, a high level of bonding, a competitive fee schedule and interest on deposits, financial strength, and one with a high level of expertise in the 1031 exchange industry.