A Qualified Intermediary, or “QI,” is a company that is in the full-time business of facilitating Section 1031 tax-deferred exchanges. The role of a QI is defined in Treasury Regulations. The QI enters into a written agreement with the taxpayer where QI transfers the relinquished property to the buyer, and transfers the replacement property to the taxpayer pursuant to the exchange agreement. The QI holds the proceeds from the sale of the relinquished property in a trust or escrow account in order to ensure the taxpayer never has actual or constructive receipt of the sale proceeds.
A Qualified Intermediary may also be known as an Accommodator, Facilitator or Qualified Escrow Holder.
Certain persons, including those who have acted as the exchanger’s employee, accountant, attorney, investment banker or broker or real estate broker within the two year period preceding the sale of the relinquished property, will be specifically disqualified from acting as a Qualified Intermediary.
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