--- title: Who Holds the Proceeds in a 1031 Exchange? description: In a 1031 exchange, the investor typically works with a qualified intermediary (QI), also known as a facilitator, who acts as a neutral third party to facilitate the exchange. image: https://www.realized1031.com/hubfs/Images/Featured/Page/Resource/qualified-intermediary-resource-feature.jpg --- [![Realized 1031 Exchange Marketplace](https://www.realized1031.com/hs-fs/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black.png?width=240&height=80&name=Realized-Logo-Black.png "Realized 1031 Logo") ](https://www.realized1031.com/) - [Wealth Management Gap](https://www.realized1031.com/the-wealth-management-gap) - [Our Process](https://www.realized1031.com/how-realized-works) - [Financial Advisors](https://www.realized1031.com/advisor) - [Resources](https://www.realized1031.com/resources) - [The Company](https://www.realized1031.com/about-us) - [Articles](https://www.realized1031.com/blog) [Register](https://www.realized1031.com/marketplace) [Log In](https://www.realized1031.com/login) - Better Business Bureau Rating: **A+** - [FINRA BrokerCheck](https://brokercheck.finra.org/firm/summary/22333) - [Call](tel:1-877-797-1031) **(877) 797-1031** # Who Holds the Proceeds in a 1031 Exchange? Posted Apr 13, 2023 ![qualified-intermediary-resource-feature](https://www.realized1031.com/hs-fs/hubfs/Images/Featured/Page/Resource/qualified-intermediary-resource-feature.jpg?width=1024&height=512&name=qualified-intermediary-resource-feature.jpg) In a [1031 exchange](https://www.realized1031.com/videos/1031-exchange), the investor typically works with a [qualified intermediary](https://www.realized1031.com/glossary/qualified-intermediary) (QI), also known as a facilitator, who acts as a neutral third party to facilitate the exchange. The QI plays a crucial role in the exchange process, as they hold the proceeds from the sale of the [relinquished property](https://www.realized1031.com/glossary/relinquished-property) and facilitate the purchase of the [replacement property](https://www.realized1031.com/blog/what-is-a-replacement-property). Once the investor sells their relinquished property, the QI holds the proceeds from the sale in an [escrow account ](https://www.realized1031.com/blog/what-does-escrow-mean-in-real-estate)until the purchase of the replacement property is completed. If the investor were to receive the proceeds from the sale of the relinquished property directly, the exchange would no longer qualify for potential[ tax-deferred](https://www.realized1031.com/glossary/deferred-gain) treatment. The QI then uses the proceeds from the sale of the relinquished property to purchase the replacement property on behalf of the investor. The QI acts as a middleman between the buyer of the replacement property and the investor, and ensures that all exchange requirements are met. Once the replacement property is acquired, the QI transfers the title of the replacement property to the investor, and the exchange is complete. At this point, the investor holds the replacement property and the proceeds from the sale of the relinquished property are no longer in escrow with the QI. The QI doesn’t have any control over the proceeds from the sale of the relinquished property, and can only use the funds to purchase the replacement property on behalf of the investor. The QI cannot provide any advice or guidance on the investment of the funds because they are strictly acting as a facilitator for the exchange. ### The Bottom Line  The QI holds the proceeds from the sales of the relinquished party in a 1031 exchange until the purchase of the replacement property is complete. The QI ensures the exchange funds are used properly and the investor receives the potential tax benefits of the exchange. Investors should work closely with their QI to ensure a smooth exchange process and compliance with all exchange requirements. This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation. Learn How To Find A Qualifed Intermediary [![Download The Guidebook To QI's](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/QI-eBook-250.png?width=250&height=250&name=QI-eBook-250.png "Learn How To Choose The Right ...") ](https://www.realized1031.com/blog/who-holds-the-proceeds-in-a-1031-exchange#blogform) Download eBook ---   --- ### Download The Guidebook To QI's ![Learn How To Find A Qualifed Intermediary](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/QI-eBook-550.jpg?width=550&height=650&name=QI-eBook-550.jpg) Learn How To Choose The Right Qualified Intermediary. By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. To manage receiving emails from Realized visit the Manage Preferences link in any email received. Search ### [Why Realized](https://www.realized1031.com/why-realized) - [Wealth Management](https://www.realized1031.com/the-wealth-management-gap) - [Why Realized](https://www.realized1031.com/why-realized) - [Our Process](https://www.realized1031.com/how-realized-works) - [Scenarios](https://www.realized1031.com/scenarios) - [Private Client Program](https://www.realized1031.com/private-client) - [Realized Exchange Services](https://www.realized1031.com/realized-exchange-services) ### [The Company](https://www.realized1031.com/about-us) - [The Team](https://www.realized1031.com/about-us) - [FAQ](https://www.realized1031.com/frequently-asked-questions) - [Testimonials](https://www.realized1031.com/testimonials) - [Press](https://www.realized1031.com/press) - [Careers](https://www.realized1031.com/careers) ### [Partners](https://www.realized1031.com/partners) - [Financial Advisors](https://www.realized1031.com/advisor) - [Broker Dealers](https://www.realized1031.com/partners/broker-dealers) - [Real Estate Agents](https://www.realized1031.com/partners/real-estate-agents) - [Certified Public Accountants](https://www.realized1031.com/partners/certified-public-accountants) ### [Resources](https://www.realized1031.com/resources) - #### Learn - [Articles](https://www.realized1031.com/blog) - [Glossary of Terms](https://www.realized1031.com/glossary) - [Capital Gains Tax Rates](https://www.realized1031.com/capital-gains-tax-rate) - #### Watch - [Video Library](https://www.realized1031.com/videos) - [Webinar Archive](https://www.realized1031.com/webinars) - #### Read - [Delaware Statutory Trust](https://www.realized1031.com/delaware-statutory-trust) - [Tenants-In-Common](https://www.realized1031.com/tenants-in-common-tic) - [1031 Exchange](https://www.realized1031.com/1031-exchange) - [Qualified Intermediary](https://www.realized1031.com/qualified-intermediary) - [Qualified Opportunity Zones](https://www.realized1031.com/opportunity-zones) #### Realized - 500 W 13th Street Austin, TX 78701 - (877) 797-1031 ##### [Contact Us](https://www.realized1031.com/contact-us) - [![Realized on Facebook](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-facebook-whiterev.png?width=60&height=60&name=social-facebook-whiterev.png)](https://www.facebook.com/Realized/) - [![Realized on LinkedIn](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-linkedin-whiterev.png?width=60&height=60&name=social-linkedin-whiterev.png)](https://www.linkedin.com/company/realized/) - [![Realized on YouTube](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-youtube-whiterev.png?width=60&height=60&name=social-youtube-whiterev.png)](https://www.youtube.com/c/Realized1031?sub_confirmation=1) - [![Realized Holdings, Inc. BBB Business Review](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/bbb/RZH2-bbb-seal.png?width=40&height=65&name=RZH2-bbb-seal.png)](http://www.bbb.org/central-texas/business-reviews/real-estate-investors/realized-holdings-llc-in-austin-tx-1000112948/#bbbonlineclick) - [![FEA Logo](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/fea/RZH2-fea-logo.png?width=82&height=65&name=RZH2-fea-logo.png "FEA Logo")](https://www.1031.org) SECURITIES DISCLOSURE Realized1031.com is a website operated by Realized Technologies, LLC, a wholly owned subsidiary of Realized Holdings, Inc. (“Realized Holdings”). Securities and/or Investment Advisory Services may be offered through Registered Representatives or Investment Advisor Representatives of Realized Financial, Inc. ("Realized"), a broker/dealer, member [FINRA](https://www.finra.org)/[SIPC](https://www.sipc.org/), and registered investment adviser. Realized is a subsidiary of Realized Holdings, Inc. ("Realized Holdings"). Check the background of this firm on [FINRA's BrokerCheck](https://brokercheck.finra.org/firm/summary/22333). Hypothetical example(s) are for illustrative purposes only and are not intended to represent the past or future performance of any specific investment. Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments are often sold by prospectus that discloses all risks, fees, and expenses. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain and should not be deemed a complete investment program. The value of the investment may fall as well as rise and investors may get back less than they invested. This site is published for residents of the United States who are accredited investors only. Registered Representatives and Investment Advisor Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all of services referenced on this site are available in every state and through every representative listed. For additional information, please contact the Realized Compliance department at 512-472-7171 or info@realized1031.com. - [Terms & Conditions](https://www.realized1031.com/terms-and-conditions) - [Privacy Policy](https://www.realized1031.com/privacy-policy) - [Form CRS](https://www.realized1031.com/hubfs/common-files/disclosures/FormCRS.pdf) - [ADV 2A](https://www.realized1031.com/hubfs/common-files/disclosures/ADV2A.pdf) - [Reg BI Disclosures](https://www.realized1031.com/hubfs/common-files/disclosures/RegBI.pdf) -   © 2026 Realized Holdings, Inc. ```json { "@context" : "http://schema.org/", "@type" : "BlogPosting", "articleBody" : "In a 1031 exchange, the investor typically works with a qualified intermediary (QI), also known as a facilitator, who acts as a neutral third party to facilitate the exchange. The QI plays a crucial role in the exchange process, as they hold the proceeds from the sale of the relinquished property and facilitate the purchase of the replacement property. Once the investor sells their relinquished property, the QI holds the proceeds from the sale in an escrow account until the purchase of the replacement property is completed. If the investor were to receive the proceeds from the sale of the relinquished property directly, the exchange would no longer qualify for potential tax-deferred treatment. The QI then uses the proceeds from the sale of the relinquished property to purchase the replacement property on behalf of the investor. The QI acts as a middleman between the buyer of the replacement property and the investor, and ensures that all exchange requirements are met. Once the replacement property is acquired, the QI transfers the title of the replacement property to the investor, and the exchange is complete. At this point, the investor holds the replacement property and the proceeds from the sale of the relinquished property are no longer in escrow with the QI. The QI doesn’t have any control over the proceeds from the sale of the relinquished property, and can only use the funds to purchase the replacement property on behalf of the investor. The QI cannot provide any advice or guidance on the investment of the funds because they are strictly acting as a facilitator for the exchange. The Bottom Line The QI holds the proceeds from the sales of the relinquished party in a 1031 exchange until the purchase of the replacement property is complete. The QI ensures the exchange funds are used properly and the investor receives the potential tax benefits of the exchange. Investors should work closely with their QI to ensure a smooth exchange process and compliance with all exchange requirements.", "articleSection" : [ "Qualified Intermediaries" ], "author" : { "@type" : "Person", "email" : "marketing@realized1031.com", "image" : "", "name" : "The Realized Team", "url" : "https://www.realized1031.com/blog/author/the-realized-team" }, "dateModified" : "2023-04-13T12:00:01+0000", "datePublished" : "2023-04-13T12:00:01+0000", "description" : "In a 1031 exchange, the investor typically works with a qualified intermediary (QI), also known as a facilitator, who acts as a neutral third party to facilitate the exchange.", "headline" : "Who Holds the Proceeds in a 1031 Exchange?", "image" : { "@type" : "ImageObject", "height" : 512, "url" : "https://733513.fs1.hubspotusercontent-na1.net/hubfs/733513/Images/Featured/Page/Resource/qualified-intermediary-resource-feature.jpg", "width" : 1024 }, "mainEntityOfPage" : "https://www.realized1031.com/blog/who-holds-the-proceeds-in-a-1031-exchange", "name" : "Who Holds the Proceeds in a 1031 Exchange?", "publisher" : { "@type" : "Organization", "address" : { "@type" : "PostalAddress", "addressCountry" : "USA", "addressLocality" : "Austin", "addressRegion" : "TX", "postalCode" : "78701", "streetAddress" : "500 W 13th Street " }, "logo" : { "@type" : "ImageObject", "height" : 60, "url" : "http://www.realized1031.com/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black-No-Margin-296x60-AMP.png", "width" : 296 }, "name" : "Realized" }, "thumbnailUrl" : "https://733513.fs1.hubspotusercontent-na1.net/hubfs/733513/Images/Featured/Page/Resource/qualified-intermediary-resource-feature.jpg" } ```