A use of a QI (Qualified Intermediary) is required when completing a 1031 tax deferred exchange.  They are generally a bank or financial institution that is not the tax payer, and will hold the proceeds of the sale until the closing.  A QI's services include: 

  • Coordinates with the taxpayer’s attorney and/or tax advisor and provides exchange transaction documentation as needed so that the 1031 exchange rules and regulations are thoroughly understood;
  • Prepares the necessary exchange documentation which includes exchange agreement, assignment agreements, notice of assignment, exchange account forms, security of funds instruments (when applicable) and instructions to the closing officers. Further, API oversees each closing to assist in proper 1031 exchange procedures;
  • Facilitates the sale of the relinquished property to the buyer and the purchase of the replacement property from the seller;
  • Holds and protects exchange proceeds on behalf of the taxpayer until exchange funds are needed to purchase the replacement property;
  • Provides guidance, information and critical timelines throughout the entire 1031 exchange process.